An Oil Trap Unlike Any Other

The Bakken discovery in North Dakota

I was involved in the 2006 discovery of Parshall Oil Field in the Bakken reservoir of North Dakota, one of the largest oil fields in North America. My prospect idea was based on meager geologic data that included two key wells and used the potential of new horizontal drilling technology.

In early 2005, with the support of our financial partner, who wished to remain anonymous, my business partner, Henry Gordon, leased about 38,200 acres in Mountrail County, nearly all for $1 to $10 per acre. At that time, he had determined that none of the acreage in this area was under lease and no Bakken wells had been drilled for more than 12 years. My research suggested an oil trap there that was unlike any oil trap in the entire Rocky Mountain Region, at the contact between mature and immature Bakken shales at a depth below 8,750 feet. The total organic carbon values were very good, averaging 12 percent. The recently discovered Elm Coulee Field, a stratigraphic-type, Bakken trap located 110 miles westward in Montana, was the only horizontally drilled Bakken oil field in the Williston Basin; it was our analog.

Parshall Prospect

By March, we had completed assembling our acreage block at a high six-figure cost. Well costs would be ten times higher, and our financial partner was neither interested in bearing the cost of such a risky well venture, nor did he have the experience to operate the drilling of a horizontal Bakken well. He wanted us to find an experienced oil operator to purchase a 75-percent interest in the acreage block and to commit to drill a horizontal Bakken well. He wanted to sell this 75-percent interest at a promoted price to cover his acreage costs and pay for his 25-percent interest in the initial well cost. Gordon and I would receive a cash commission if we were able to find an acceptable investor and operator. This offer would terminate on May 20 if no investor was found. Finding such a buyer proved to be a heavy lift. I prepared a 65-slide Power Point presentation that included all of my geologic data (Bakken and Three Forks) and engineering and land information, as well as a description of the new horizontal drilling technology being used at Elm Coulee. It was very complete and told a good story. I named it Parshall Prospect.

A Problematic Prospect

As soon as the presentation was completed, in April 2005, Gordon and I showed Parshall Prospect to 17 companies, along with our partner’s offering terms. We knew that the primary obstacles we would encounter in marketing this prospect were:

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Badlands topography-Parshall Field

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I was involved in the 2006 discovery of Parshall Oil Field in the Bakken reservoir of North Dakota, one of the largest oil fields in North America. My prospect idea was based on meager geologic data that included two key wells and used the potential of new horizontal drilling technology.

In early 2005, with the support of our financial partner, who wished to remain anonymous, my business partner, Henry Gordon, leased about 38,200 acres in Mountrail County, nearly all for $1 to $10 per acre. At that time, he had determined that none of the acreage in this area was under lease and no Bakken wells had been drilled for more than 12 years. My research suggested an oil trap there that was unlike any oil trap in the entire Rocky Mountain Region, at the contact between mature and immature Bakken shales at a depth below 8,750 feet. The total organic carbon values were very good, averaging 12 percent. The recently discovered Elm Coulee Field, a stratigraphic-type, Bakken trap located 110 miles westward in Montana, was the only horizontally drilled Bakken oil field in the Williston Basin; it was our analog.

Parshall Prospect

By March, we had completed assembling our acreage block at a high six-figure cost. Well costs would be ten times higher, and our financial partner was neither interested in bearing the cost of such a risky well venture, nor did he have the experience to operate the drilling of a horizontal Bakken well. He wanted us to find an experienced oil operator to purchase a 75-percent interest in the acreage block and to commit to drill a horizontal Bakken well. He wanted to sell this 75-percent interest at a promoted price to cover his acreage costs and pay for his 25-percent interest in the initial well cost. Gordon and I would receive a cash commission if we were able to find an acceptable investor and operator. This offer would terminate on May 20 if no investor was found. Finding such a buyer proved to be a heavy lift. I prepared a 65-slide Power Point presentation that included all of my geologic data (Bakken and Three Forks) and engineering and land information, as well as a description of the new horizontal drilling technology being used at Elm Coulee. It was very complete and told a good story. I named it Parshall Prospect.

A Problematic Prospect

As soon as the presentation was completed, in April 2005, Gordon and I showed Parshall Prospect to 17 companies, along with our partner’s offering terms. We knew that the primary obstacles we would encounter in marketing this prospect were:

  • The few wells that had been drilled
  • The fact that the nearest commercial Bakken oil production was more than 100 miles westward
  • The large size of the acreage block which increased the prospect’s cost
  • The Bakken’s low vitrinite reflectance (Ro), which at that time was a major concern
  • The low 100-ohm resistivity (a measure of oil saturation) of the Bakken reservoir, versus more than 1,000-ohm resistivity at Elm Coulee, our analog
  • The mature-immature boundary problem, including the low Tmax not prevalent in source beds like the Bakken

To address these problems, I was proposing an oil trap unlike any in the Rockies. Our financial partner’s May 20 deadline arrived; he agreed to give us more time, but to no avail. Then, in early July 2005, he called. EOG had announced the location of the Nelson Farms well that would commence shortly, a joint venture with Cordillera Energy Partners and Prima Exploration. So, our arrangement with our financial partner ended, perhaps to be renewed after their well was completed.

On July 14, 2005, EOG Resources spud the first horizontal Bakken well to be drilled in this area in more than 12 years. It was the No. 1 Nelson Farms, located in Section 24, Township 156 North, Range 92 West, less than one mile from the Gulf No. 1-24 Nelson well, one of my two key wells. The EOG well was drilled vertically to about 9,500 feet; it then angled horizontally to a total depth of 14,433 feet. The well was completed as a poor producer, far below the quality for which they had hoped. As of August, 2019, it has produced only 122,847 barrels with a present daily rate of only 24 barrels. Of genuinely historic importance, it ranks as one of the most important wells ever drilled in North Dakota. It is the discovery well for the horizontally-drilled Bakken reservoir in North Dakota.

‘A Huge Unconventional Resource Play’

The poor results of the Nelson Farms well added very little to the quality of the Parshall Prospect. Our financial partner called and asked us to try again to get it sold. It was August and five months had lapsed with no success. September and October came and went, again without success.

Finally, near the end of 2005, EOG called our financial partner to see if our acreage block was still available. They negotiated a trade and the sale of the entire block to EOG occurred in February 2006.

After conducting a 3-D seismic survey, EOG staked location for their well, the No. 1-36 Parshall in Section 36, Township 153 North, Range 90 West, planned as a 14,500-foot horizontal Bakken test. It was a twin to the Lear No. 1 Parshall well, my other key well, drilled in 1981. At a depth of 11,325 feet, the new well encountered extremely high reservoir pressure that precluded further drilling. It was completed in May 2006, from a 1,600-foot lateral producing 463 barrels oil per day. As the discovery well for Parshall Field, it, too, deserves to be long remembered because of its significance to the oil industry in the Rocky Mountain Region.

A second well, drilled in the same Section 36 less than one mile from the discovery well, encountered a similar high reservoir pressure problem and was completed from a short horizontal of about 2,500 feet. The third well, the EOG No. 1-03H Bartelson, located one mile southward, is the first successful completion from a long horizontal lateral, at a total depth of 14,900 feet. It was completed for 628 barrels of oil per day. As of August 2019, this well has produced 544,859 barrels of oil.

All of our acreage block was developed and proven commercially productive. The first two wells drilled by EOG were offsets to my two key wells and both were major discoveries.

More than16,000 Bakken and Three Forks wells have since been completed. Daily production now is approximately 1.4 million barrels and produced reserves total more than 3 billion barrels. This Bakken accumulation extends over 6 million acres, one of the largest in size in the world. My estimate of recoverable oil reserves from the Bakken accumulation in North Dakota is in excess of 15 billion barrels.

Soon it became evident that Parshall fit the concept of a huge unconventional resource play. That is:

  • A vast and continuous oil accumulation that covers millions of acres
  • No clearly-defined oil-water contacts
  • Overpressure
  • Sweet spots of production
  • Low water production
  • Rich source rocks and poor quality reservoir rocks. It is a closed system 160-feet thick and extends from the top of the Upper Bakken shale to 70 feet into the Three Forks formation.

Disappointment and Thrill

Whatever success I have had I attribute to having two good character attributes: perseverance and tenacity. If you have a good idea, regardless of how remote, don’t ever give up. Once before, I netted a one-half million-dollar commission from a geologic idea that emerged from a 40-year-old publication that I uncovered. The industry’s inherent high risk requires intelligence, integrity and skill in order to compete. You need to be able to experience and overcome the disappointment of many dry holes to, hopefully, experience the thrill of an oil discovery.

America offers the oil industry many advantages, two of the best being private ownership of minerals and government support of entrepreneurship.

EOG Resources needs to be commended for undertaking these huge financial risks. They first participated, at considerable cost, in drilling the marginally commercial Nelson Farms well, classified as the discovery well for Parshall field. This was followed by purchasing, at a promoted price, the 38,200-acre block belonging to our financial partner. It then took three costly wells to finally confirm the Parshall Field discovery. Their reward was discovery of a major oil field, one of the largest in North America.

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