Regional Spotlight: Three Forks

Quietly growing in the shadow of the Bakken shale, the Three Forks has emerged as a significant tight-oil resource play. Interest in the Three Forks is expanding as more wells are drilled and the magnitude of this unconventional opportunity is being revealed.

Current Three Forks production is in the range of 78,000 barrels of oil equivalent (BOE) per day from some 435 horizontal wells, according to IHS Inc. In the Williston Basin, Three Forks resource potential has recently been estimated at more than 3.7 billion barrels of undiscovered technically recoverable oil, according to a recent two-year reassessment of the Bakken petroleum system by the USGS.

Geology. In the U.S., the Three Forks formation extends across a large area of western North and South Dakota, northern Montana and eastern Idaho. In Canada, its age equivalents extend into southern Saskatchewan and Manitoba and into the southern Alberta Basin.

The formation is productive in a large portion of the Williston Basin and just across the border in southeastern Saskatchewan and southwestern Manitoba. The equivalent stratigraphic unit in the southern Alberta Basin, the Big Valley formation, is beginning to be exploited in relatively thin carbonate shoals, sourced from the Exshaw shale (a Bakken equivalent).

In the Williston Basin, the Three Forks lies conformably above the Bird-bear (Nisku) formation and is unconformably overlain primarily by the Lower Bakken shale, or in some areas, the Pronghorn member of the Bakken.The Three Forks is thickest in the central part of the basin, where it is up to 250 feet thick.

In general, the Three Forks consists of silty dolostone, clay-rich dolostone, red beds and anhydrites. It is comprised of facies groups interpreted to include terrestrial paleosols, sabkha and intertidal to subtidal deposits.Reservoir rocks are composed of alternating thick laminae and very thin beds of silt-sized dolomite and green/grey argillaceous mudstone.

The dolomite intervals contain measurable porosity, 6% to 8%, but low permeability, generally less than 0.1 millidarcies. Recent cores show oil saturation throughout the interval. The formation is generally overpressured and found at depths of 8,200 to 11,200 feet. The primary source rock for the Three Forks is the overlying Lower Bakken shale. However, where the lower and middle Bakken thin, in the southern portion of the basin, the Upper Bakken shale is the primary source rock.

The upper portion of the interval, the Upper Three Forks, has been the primary target for the oil and gas industry, with the first potential reservoir just 20 feet below the base of the Lower Bakken shale. The industry designates the stacked reservoirs within the Three Forks by “benches,” with the first bench and second bench in the Upper Three Forks, the third bench in the Middle and the fourth bench at the base of the formation.

Most of the current production is from the first bench, but Continental Resources Inc. has established commercial production from both the second and third benches. Continental reports that the first and second benches are widespread across the basin, the third bench is widespread but contains more shale and anhydrite, and the fourth bench contains more locally present dolomites.

Production trends and drilling. Drilling the Three Forks is similar to the Bakken, and involves long laterals and multistage fracture stimulations. The 90-day cumulative production bubble map for all Three Forks horizontal wells (drilled from 2008 to 2012) shows the most productive wells have occurred along the Nesson anticline, the southern extent of the Little Knife anticline in Stark and Billings counties, and in northern Dunn, southwestern Mountrail and western Divide counties.

The large structural elements found in the Williston Basin appear to be important controls on Three Forks production. The most active Three Forks drillers are contemplating three to four drilling locations per 1,280-acre drilling unit, primarily for the first bench. Spacing pilots in the Three Forks are under way and will help guide future drilling density including development of all productive benches.

Operator activity. Active Three Forks operators include Continental Resources Inc., ConocoPhillips, QEP Resources Inc., EOG Resources Corp., Hess Corp., Whiting Petroleum Corp. and Samson Resources Corp., among others.

Continental Resources has drilled nearly 20% of all Three Forks wells in the Williston Basin. With its existing wells and the 10-well coring program it completed in 2012, it has the best Three Forks dataset in the industry.The company has reported that the cores indicate oil saturation from the base of the Lodgepole to the top of the Nisku. The company has several pilot density projects for 320-acre and 160-acre spacing in multi-Three Forks benches.

QEP Resources' most recent acquisition of Helis Oil & Gas in eastern McKenzie County provided it with excellent Three Forks producing wells and future drilling locations (South Antelope area). QEP is anticipating Three Forks long-lateral wells, drilled post-January 2010 in this area, will provide an average estimated ultimate recovery of 990,000 BOE. The area is clearly in a sweet spot for the Three Forks with several existing wells on target to produce more than 1 million BOE. QEP's Fort Berthold Three Forks wells have also performed well and are comparable to its best Bakken wells. Looking forward, the USGS reassessment may sharpen producers' focus on the Three Forks. In the meantime, continued Three Forks drilling will add significant production and reserves to an already oil-rich basin.

Tim Pish, Scotiabank, (713) 437-5048, tim.pish@scotiabank.com.

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