While praising efficiency gains by Bakken producers this year, North Dakota's chief oil/natural gas regulator, Lynn Helms, said that in some cases quality has suffered in the haste to complete wells at an ever-faster pace.
Helms, the director of the state Department of Mineral Resources (DMR), offered the insight during a briefing on state production statistics. "We have begun to see situations primarily in the running of seven-inch well casings where folks have experienced problems of shale collapse and poor cement jobs," he said.
Noting that there are strict state rules in place on the cementing of wells, Helms said in the past two weeks he had observed three different wells with cementing problems that caused those wells to be sidetracked. "Those are really expensive problems, so the pressure to increase efficiency may be costing producers more in some cases," he said.
In hydraulic fracturing (fracking) jobs, Helms said DMR has found increasing numbers of "frack hits," in which an offset well experiences pressure spikes from the fracking taking place in a neighboring well. "That may be caused by the fact we see continued migration to high-volume frack treatments that use much larger liquid volumes and higher sand loadings. In both cases, we are starting to see quality issues develop more."
Helms said the frack hits appear to be occurring from adjacent wells on the same pad and from wells on adjacent pads.
Reporters participating in the briefing wanted to know if this means that environmental impacts, particularly groundwater contamination, are a greater risk in today's oilfield operations. "I would have to say ‘no’ because of the various rigorous rules we have [in North Dakota] covering casing and cementing," Helms said.
"In no cases have we seen a long-term problem of cement or the installation of cement related to the protection of groundwater."
Helms said the problems encountered don't relate to groundwater protections and involve how a well is going to be fracked and still protect against draining oil from a neighboring spacing unit on multi-well pads. "How do they ensure that the rest of the wells on a pad don't have frack hits" is another way that Helms described the situation. For wells that have encountered these problems they present a major engineering challenge, he said.
In the face of growing numbers of drilled but uncompleted wells, North Dakota is considering on a case-by-case basis giving producers extra time beyond the current one-year limit to complete wells. Current rules require wells to be plugged and abandoned if they can't be completed in a year's time.
"The state is not going to force oil into an already oversupplied market," Helms said. "We realize that everyone benefits from putting a well on the market at $60/bbl, but no one benefits at $35/bbl. That's probably the biggest thing the state can do at this time, along with allowing a little latitude on the [associated natural gas] flaring goals."
Helms said it is also critical for the state to make sure all of the needed infrastructure projects get built because "it is not a matter of whether the activity and prices come back; it is when that happens, and the infrastructure needs to be there when that happens."
In the meantime, state policy is "leaning toward" allowing wells to stay out of the market longer than the one-year rule applied under more favorable crude oil prices, Helms said.