Denver-based exploration and production (E&P) independent QEP Resources Inc. reported encouraging results from its first four-well pad drilling on recently acquired South Antelope property in the Williston Basin in North Dakota. QEP said it also completed nine wells -- four in the Bakken and five in the Three Forks formations on the Fort Berthold Indian Reservation.
According to QEP, the four Bakken wells registered an average 24-hour gross initial production (IP) rate of 3,598 boe/d for each well (3,929 boe/d post-processing). That included the first two QEP-operated Bakken formation wells, which had an average 24-hour IP rate of 4,174 boe/d (4584 boe/d post-processing).
As part of a strategy of increasing its acreage in the liquids-rich Bakken Shale and Three Forks formations, a QEP subsidiary last year entered into two deals with multiple sellers to acquire "significant crude oil development properties" in the Williston Basin for an aggregate purchase price of close to $1.38 billion (see Shale Daily, Aug. 27, 2012).
A Bakken expert, Richard Zeits, was quoted earlier this month on the stock market/financial analysis news website, SeekingAlpha.com, as saying the initial results bode well for QEP's future success. Zeits said last year's purchase of the South Antelope property may prove to be "one of the notable bargain acquisitions" in the Bakken's history.
Despite its relatively small size, the South Antelope block could provide some of the "best acreage in the entire Bakken play," according to the online commentary.
"I am pleased with QEP's strong operational results this quarter, and I am encouraged by the very strong well results from our first operated multi-well pad on the South Antelope acquisition," said QEO CEO Chuck Stanley. "As anticipated, it has taken some time to transition to pad development, where multiple wells are drilled and cased before completion activity commences. Based on our experience in other resource plays, we believe this is the right approach for efficient development of the Bakken and Three Forks reservoirs in the Williston."
Stanley added that the company's recent well completions at Fort Berthold properties "continue to exhibit strong initial performance."
QEP also reported that a fifth rig is moving onto location in the South Antelope property, and it expects to start the first well on a multi-well pad by mid-June, bringing to eight the number of rigs the company has working in the Williston. In addition, the company's 10,000 b/d Blacks Fork fractionator expansion is nearing completion and commissioning this month.
Last year's purchase included 27,600 net acres in Williams and McKenzie counties in North Dakota, located about 12 miles west of QEP's core acreage in the Williston Basin. At the time, QEP said the aggregate net production of the assets was around 10,500 boe/d, with estimated aggregate net proved and probable reserves of 125 million boe, comprised of 81% crude oil, 9% natural gas liquids and 10% natural gas. QEP plans to operate almost 90% of the acreage.
QEP has said that the Bakken and Three Forks are both prospective across all of the acreage and will be developed by separate horizontal wells targeting each formation. QEP's net acreage in the Williston Basin stands at 118,000 acres.