NORX Bakken Fairway: The Bakken Fairway

NORX Bakken Fairway:



The Bakken Fairway was first discovered and drilled in Alberta, Canada, but now extends deep into northwest Montana into Lewis & Clark County where it is bordered by the Rocky Mountain Thrust Zone on the west and the Sweetgrass Arch to the west. The South Sun River Bakken Prospect is in the area of wells drilled through the Bakken by Shell, ARCO, SUNCOR , Sun Exploration, Occidental Petroleum, Phillips Petroleum, and Montana Power.

The company believes that the basics of the Bakken Formation in northwest Montana are equivalent to, and exceed, the Bakken Formation in the Williston Basin of North Dakota. The critical Middle Member (Sappington) is 20-30’ thick in the Bakken Fairway compared to an average of 10’ thick in the Williston Basin. The financial impact of Bakken revenue in North Dakota doubled the income of the State Treasury in a single year.

The South Bakken Fairway is at least 175 miles long (north-south) and 60 miles wide (east-west), and descends from Alberta, Canada southwards through Montana’s Glacier, Toole, Pondera, Teton and Lewis & Clark counties so far. The Bakken Formation has upper and lower shale members with Total Oil Content (TOC) up to 12%, and a middle silt member known as the Sappington that can be up to 30’ thick. The Bakken produces high grade oil with 23-40 API gravity, and production is largely water free.

The Bakken in the Fairway typically has a Vitrinite Reflectance between 0.65 and 1.3 which is a key indicator for oil production. Vitrinite Reflectance is an important measure of organic content in oil producing shale.

The depth of the Bakken Formation is between 4,000’ and 15,500’ in the northwest Montana. The western boundary of the Bakken Fairway is flanked by the Rocky Mountain Thrust Belt, where proximity to higher tectonic temperatures has caused the Bakken to become overly mature and gasified. The central and eastern areas of the Bakken Fairway are flanked by the Sweetgrass Arch and have perfect maturity for oil generation, over-pressured conditions and prolific oil production.

BAKKEN SHALE CORE SAMPLE SHOWING NATURAL FRACTURES

The Bakken Fairway is an active oil generating basin, and multiple producing Bakken wells prove it. The map on the next page displays contours of thermal maturity defined by Vitrinite Reflectance values (Ro). Oil generation from organically rich shale units is considered to begin when Ro is > 0.65, with peak oil generation at an R0 of 1, and oil generation ceasing when Ro is >1.35. The map also shows Total Oil Content.

Vitrinite is one of the primary components of coals and biogenic shales. Vitrinite is a type of maceral, where "macerals" are organic components of coal analogous to the "minerals" of rocks. Vitrinite has a shiny appearance resembling glass (vitreous). It is derived from the cell-wall material or woody tissue of the plants from which coal was formed.

The study of vitrinite reflectance is a key method for identifying the temperature history of sediments in sedimentary basins. Its utility as a tool for the study of sedimentary organic matter metamorphism from kerogens to hydrocarbons has been increasingly exploited. The key attraction of vitrinite reflectance in this context is its sensitivity to temperature ranges that largely correspond to those of hydrocarbon generation (i.e. 60 to 120°C). This means that, with a suitable calibration, vitrinite reflectance can be used as an indicator of maturity in hydrocarbon source rocks. Generally, the onset of oil generation is correlated with a reflectance of 0.5-0.6% and the termination of oil generation with reflectance of 1.3 %.

The Total Oil Content (T.O.C.) is also an important measure of available hydrocarbons, and core samples indicate T.O.C. is normally >10% in the Bakken Fairway. The map on the following page indicates that the South Sun River Bakken Prospect lays in an area of high oil production potential based on the thermal maturity and total oil content readings.

Leasing and drilling activity in the Bakken Fairway region has increased dramatically since late 2010. As of March, 2012, over 100 wells have been drilled in Alberta and Montana with the Bakken as the principal target. Over 30 of these wells were vertical wells with the primary purpose of delineating the Bakken formation.

In Montana, Newfield, Anschutz and Rosetta are considered to be the most active drillers, while historically Occidental, ARCO, Shell, Phillips and Sun Exploration have all been active in the South Sun River Bakken Prospect area. In Alberta, it is Crescent Point, Murphy Oil, Bowood and Shell who are the most active Bakken drillers. Analyst Wood Mackenzie estimated 2.6 Billion BO may be recovered from the Bakken Fairway.