## UNITED STATES DEPARTMENT OF THE INTERIOR BUREAU OF LAND MANAGEMENT



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# Revised Activity and Surface Disturbance Projections for the Reasonable Foreseeable Development Scenario for Oil and Gas Activities on Bureau Managed Lands in the North Dakota Study Area

February 25,2011

Pr

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Alf r ed M. Elser

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. Dean P. Stilwell

Name Name

Geo l ogist Geo l ogist P G -1 070

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Stan W. Davis-Law r ence

Name

Petroleum Engineer

Ti t le

M a na g ement Appr ova l:



# jl4iCAJ. David Chase

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Chief, Rese r voir Management Gro u p

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## REVISED ACTIVITY AND SURFACE DISTURBANCE PROJECTI ONS FOR THE REASONABLE FORESEEABLE DEVELOPMENT SCENARIO FOR OIL AND GAS ACTIVITIES ON BUREAU MANAGED LANDS IN THE NORTH DAKOTA STUDY AREA

Image from the North Dakota Study Area stratigraphic chart, Bureau files.



### ALFRED M. ELSER, Ph.D. DEAN P. STILWELL, and STAN W. DAVIS

- LAWRENCE

UNITED STATES DEPARTMENT OF THE INTERIOR BUREAU OF LAND MANAGEMENT



## FINAL

February 25 , 2011

### TABLE OF CONTENTS

Discussion

....................................................................................................................... 2 Methodology

............................................................................................................... 2 Revised Activity and S urface Disturbance Projections

.............................................. 3

Estimated Future Oil and Gas Production

.................................................................. 5

References

....................................................................................................................... 6 List of Figures

................................................................................................................. 7

List of Tables

.................................................................................................................. 7

1

## Revised Activity and Surface Disturbance Projections for the Reasonable Foreseeable Development Scenario for Oil and Gas Activities on Bureau Managed Lands in the North Dakota Study Area 1



### Discussion

The final report of the Reasonable Foreseeable Development Scenario for Oil and Gas Activities on Bureau Managed Lands in the North Dakota Study Area (Final Report) was submitted to the Montana State Office on October 2, 2009. During the mon ths that followed, new developments in well drilling and completion techniques allowed for operators to effectively target the Three Forks Formation in a manner similar to that employed in the most recent Bakken play (see discussion in final report). Since this Three Forks play was not foreseen to be as productive or as attractive a drilling target as it became, a supplement to the F inal Report was made.



### Methodology 2

The first step in determining how to revise the projected a ctivity and disturbance estimates involved a new poll of the operators in the Study Area who were actively drilling the Three Forks Formation. A list of operators was obtained from the North Dakota Field Office. Each operator was contacted by telephone and asked what additional development activity they anticipated during the Planning Period as it related to the Three Forks, and where they anticipated development occurring. A new development potential map was produced based on the original work included in the Final Report and the new information gathered from these operators (Figure S1).

During the course of the operator polling it became apparent that not only would the activity projections need to be revised, but also the method for calculating the associated surface disturbance. In the Final Report we had originally tied surface disturbance to individual wells. Each well had an associated initial and interim disturbance acreage which varied type of well (exploratory, existing, oil, gas, or coalbed gas). However, many of the Three Forks wells anticipated to be drilled by the polled operators are expected to be co -located with new or existing Bakken wells, and/or drilled from multi-well pads. Resultantly, the method for calc ulating disturb ance was revised. Instead of a per well disturbance figure, calculations were made per well pad (Table s S1 and S2 ).

Polling of active operators conducted in May, 2010 indicated areas of activity where development is expected to occur with an average of 1.5 wells per well pad. The areas are

1 This document is a supplement to the Reasonable Foreseeable Development Scenario for Oil and Gas Activities on Bureau Managed Lands in the North Dakota Study Area (Stilwell, et al., 2009).

2 The reader is encouraged to refer to the Final Report for a deta iled discussion of the general methodology used in determining development and surface disturbance projections. Only the deviations from the original method are discussed in this report.

2where either the Bakken or Three Forks new exploratory oil well development is expected to include some multi-pad drilling for either Three Forks or Bakken oil, as well as areas where existing or new Bakk en wells will be co -located with Three Forks wells. It is important to note that 1.5 wells per pad is the anticipated average , and that some well pads may have far more than the average (as many as eight according to one operator's estimate), but many more will be single

- well pads. These areas are shown on the development potential map (Figure S1) and include lands in both the High and Very High development potential categories.



### Revised Activity and Surface Disturbance Projections Since the revisions to the Final Report only include changes to projected development associated with the Three Forks and Bakken oil plays, the original projections related to gas and coalbed gas activity have remained unchanged. These projections are included on Table S1 and S2. It should be noted, however, that these tables differ from the corresponding tables in the Final Report (Table s 5, 8a and 8b) 3 4 5 in that the total number of well pads are presented, and not individual wells. For gas and coalbed gas these are considered i nterchangeable as the average well pad for these types of development is expected to be associated with only one well. Such is not the case for new exploratory oil wells, however.

Included in the original Table 8 from the Final Report were wells projected to be drilled from August 2008 through December 2009. This category was necessary at the time because the Planning Period was to start in January 2010, and the most current drilling data was only available through August 2008 at the time of the initial wr iting. Since this supplement/revision was prepared after December 2009 and drilling data was available for the August 2008 to December 2009 time period, this category was dropped from the revised table as any wells drilled during that time are now co nsidered historic and not part of future projections. Well data was downloaded from IHS Energy that included wells s pud through August, 2010 in order to obtain an accurate account of existing active gas wells and active oil wells for Table S2a (IHS Energy Group, 2010).

Oil wells are the primary category in which revisions to the Final Report were needed. The vast majority of existing active oil wells at the time of the revision were single well pads. No changes were made to this category in the table except to update the actual number based on the new data download mentioned above.

Multi

- well pads associated with new exploratory oil development will have slightly larger initial surface disturbance (4.2 acres/pad) than the single well pads (4.0 acres/pad).

3 Table 5. Estimated oil and gas (excluding coalbed gas) development potential classification acres, number of townships, projected average drilling densities, and percentage of the North Dakota Study Area within each development potential classification type for the period 2010 through 2029.

4 Table 8a. Disturbance Associa ted With Existing Well Pads and Projected Active Well Pads for the Baseline Scenario (Short

- Term Disturbance).
5 Table 8b. Disturbance Associated With Existing Well Pads and Projected Producing Well Pads for the Baseline Scenario (Long

- Term Disturbance).

3Access road disturbance will remain the same. Based on information provided by the North Dakota Field Office, operator input, current drilling trends, and institutional knowledge, areas of Very High development potential are expected to average 30 pads per township. Similarly, areas of High development potential are expected to average 15 pads per township (Table S1).

Tables S2a and S2 b project short-term and long- term disturbance associated with existing wells and projected drilling activity for 2010 through 2029. The method used to determine the number of new wells drilled during this period has been previously discussed here and in the Final Report. In addition, we assumed that:

**•** of the existing active wells , eight gas wells and 879 oil wells will be ab andoned by December 2029,

**•** the success rate of new coalbed gas wells will be 90 percent,

**•** the success rate of new noncoalbed gas wells will be 93 percent as determined by the previous 20 years of drilling history, and

**•** the success rate for new oil pads will average 78 percent for single -well pads, and 88 percent for multi

- well pads

.
The rationale behind these success rates is discussed in detail in the Final Report with the exception of the rate for new multi

- oil well pads. 6 Multi

- well pads are expected to have a greater success rate than for single

- well pads as only one of the multiple wells need be a productive well for the well pad to remain in the long-term. Based on the assumptions outlined in the Final Report and regiona l data comparing the suc cess rates of multi

- well versus single- well pads, a success rate ten percent greater than that for single

- well pads is used. This amounts to 88 percent.

Table S2 a shows our projection of new exploratory and development well pads (6,765 pads with 727 of those managed by the Bureau) that could be constructed in the Study Area from 2010-2029. The number of associated wells would be 8,460 total new exploratory and development wells with 921 managed by the Bureau. There are an additional 6,971 existing active wells/pads (211 gas and 6,760 oil) ( IHS Energy Group, 2010 ). Of those existing wells /pads, 972 total wells ( 121 gas, and 851 oil wells) are Bureau managed. Table S2 a also calculates associated acres of total surface disturbance (short

- term disturbance) directly associated with all new and existing well pads. Approximately 66,806 acres of new and existing short- term surface disturbance ( 7,945 acres of disturbance on Bureau managed lands) could occur if all 6,765 projected wells are dril led.
Table S2b calculates new producing well pads remaining active after all new exploratory and development wells are drilled and all dry holes are abandoned and reclaimed (5,711 total new well pads with 602 of those pads on Bureau managed lands). There are an additional 6,084 existing well pads (857 on Bureau managed l ands) that will remain active after some formerly existing producing wells cease to be productive and are

6 In the Final Report, the success rate for new exploratory oil wells is presented as 78 percent. Since single

well pads were assumed in the Final Report, this success rate was used in the revision for new exploratory single

- oil well pads.

4abandoned. Table S2b also calculates unreclaimed associated acres of total surface disturbance (long- term disturbance) directly ass ociated with all remaining well pads

. Approximately 17,405 acres of new unreclaimed surface disturbance (1,945 acres of unreclaimed Bureau managed lands) could remain in the l ong- term. Total unreclaimed long-term surface disturbance (for all well types) would be 36,631 acres, with 4,499 of those acres on Bureau managed lands.



### Estimated Future Oil and Gas Production As indicated above, we projected 8,460 wells (not including coalbed gas wells) would be drilled within the analysis period of 2010 through 2029. A table projecting wells spud by year, for the 2010 through 2029 period, was calculated along with a confidence interval of values (Table S3). These values were determined by using a GNU Octave program that was written to statistically analyze the available historical drilling and production data constrained by oil and gas futures prices and projected drilling activities (8,460 new wells in 20 years) to generate the values in Table S3. Although Table S3 projects a range of new wells that could be drilled each year, the mean value projected should be considered the most likely scenario for new drilling in any one year and cumulatively for the 20-year period. Yearly drilling projections are provided for analysis purposes only. The likel i hood that the mean well projection in any given year will match actual activity is low. As stated earlier, we expect that if coalbed gas drilling does occur that activity will only come about toward the end of the 20- year assessment period and drilling will be in groups of 16 to 25 wells.

Table S4 is our forecast of hydrocarbon production for 20 years beyond 2009. Both gas and oil production will increase during the period. The cumulative values listed are just for the 2010 through 2029 projection period and ignore historical production. Of the 64,743,748 barrels of forecasted cumulative oil production, about 7,575,019 barrels are projected to come from Bureau managed oil and gas minerals. Of the 1,740,974,343,000 cubic feet of forecasted cumulative gas production, about 480,508,918,668 cubic feet are projected to come from Bureau managed oil and gas minerals.

As with the Final Report, c oalbed gas production was not assessed. If any coalbed gas production does come online during the 20- year assessment period it will only be a minor part of the total hydrocarbon production between 2010 and 2029.

5

### References IHS Energy Group, 2010, Rocky Mountain US Well Data: Network License for PI/Dwights PLUS Version 1.7.

Stilwell, D.E., Elser, A.M., and Davis-Lawrence, S.W., 2009, Reasonable Foreseeable Development Scenario for Oil and Gas Activities on Bureau Managed Lands in the North Dakota Study Area: U.S. Department of the Interior, Bureau of Land Manage m ent, Wyoming State Office . Available for download from http://www.blm.gov/mt/st/en/fo/north_dakota_field/rmp/RFD.html

6

### List of Figures Figure S1. Oil and gas (excluding coalbed gas) development potential and projected pad densities and associated wells within the North Dakota Study Area for 2010 through 2029.



### List of Tables

Table S1. Estimated oil and gas (excluding coalbed gas) development potential classification acres, number of townships, projected average drilling densities, and percentage of the N orth Dakota Study Area within each development potential classification type for the period 2010 through 2029. Table S2a. Disturbance Associated With Existing Well Pads and Projected Active Well Pads for the Baseline Scenario (Short- Term Disturbance)

. Table S2b. Disturbance Associated With Existing Well Pads and Projected Producing Well Pads for the Baseline Scenario (Long

- Term Disturbance). Table S3. Annual projection of North Dakota Study Area Wells drilled from 2010 to 2029 and their associated confidenc e interval. Table S4. Forecast of North Dakota Study Area annual and cumulative oil and gas production for 2010 through 2029.

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# ­ N Oil and gas (excluding coalbed gas) development potential and projected pad densities and associated wells within the North Dakota Study Area for 2010 through 2029 

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# Study Area Conventional Oil and Gas Potential (Pads per township during planning period 2010 to 2029)

Very High - greater than 20 pads

1.5 wells per pad

1 well per pad

High - greater than 10 to 20 pads

1.5 wells per pad

1 well per pad

Moderate - greater than 2 to 10 pads
1 well per pad
Low - greater than 1 to 2 pads 1 well per pad

Very Low - fewer than 1 pad
1 well per pad

Not Assessed (National Park Service)

Tribal Lands

0 25 50 Miles

July, 2010 1:1,419,517 Dean Stilwell, Geologist Al Elser, Geologist No warranty is made by the Bureau of Land Management as to the accuracy, reliability, or completeness of these data for individual or aggregate use with other data. Stan Lawrence, Petroleum Engineer Original data was compiled from various sources. This information was developed through digital means and may be updated without notification.Table S1

. Estimated oil and gas (excluding coalbed gas) development potential classification acres , number of townships, projected average drilling densities, and percentage of the North Dakota Study Area within each development potential classification type for the period 2010 through 2029.

Development Potential

Very High (1.5 wells/pad)

Very High (1 well/pad)

High (1.5 wells/pad)

High (1 well/pad) Acres

3,469,258

622,928

1,564,674

1,195,994 Area (townships)

150.58

27.04

67.91

51.91 Average pads per township

30.00

30.00

15.00

15.00 % of Study Area

13.68

2.46

6.17

4.72

Moderate 3,581,305 155.44 6.00 14.12

Low 5,865,171 254.56 1.50 23.13

Very Low 9,059,101 393.19 0.05 35.72

None 0 0.00 0.00 0.00Table S2a. Disturbance Associated With Existing Well Pads and Projected Active Well Pads for the Baseline Scenario (Short-Term Disturbance)

Well Pads/Wells Acres of Surface Disturbance

Type Total
Pads Total Wells BLM Managed

Pads BLM Managed

Wells Access
Roads Well Pad Total BLM Managed

New Exploratory and Development Coalbed Gas (2010-2029) 150 150 7 7 0.6 0.50 165 8

New Exploratory and Development Gas (2010-2029) 315 315 34 34 0.6 0.50 347 40

New Exploratory and Development Oil (1.5 wells/pad) (2010-2029) 3,691 5,537 402 602 2.9 4.20 26,206 2,945

New Exploratory and Development Oil (1.0 wells/pad) (2010-2029) 2,609 2,609 284 284 2.9 4.00 18,002 2,023

Total New Exploratory and Development Well Pads/Wells 6,765 8,611 727 927 44,720 5,017

Existing Active Gas (as of August 2010) 211 211 121 121 0.3 0.25 116 71

Existing Active Oil (as of August 2010) 6,760 6,760 851 851 1.5 1.75 21,970 2,857

Total Existing and Projected Well Pads/Wells 6,971 6,971 972 972 22,086 2,928

Total Well Pads/Wells 13,736 15,582 1,699 1,899 66,806 7,945 Total Short-Term DisturbanceTable S2b. Disturbance Associated With Existing Well Pads and Projected Producing Well Pads for the Baseline Scenario (Long-Term Disturbance)

Well Pads/Wells Acres of Surface Disturbance

Type Total
Pads Total Wells BLM Managed

Pads BLM Managed

Wells Access
Roads Well Pad Total BLM Managed

New Producing Coalbed Gas (2010-2029) 135 135 6 6 0.3 0.25 74 4

New Producing Gas (2010­ 2029) 293 293 21 21 0.3 0.25 161 12

New Producing Oil ( 1.5 wells/pad) (2010-2029) 3,248 4,872 353 530 1.5 1.75 10,556 1,186

New Producing Oil (1.0 wells/pad) (2010-2029) 2,035 2,035 221 221 1.5 1.75 6,614 743

Total New Producing Well Pads/Wells 5,711 7,335 602 778 17,405 1,945

Existing Active Gas (as of August 2010) 1 203 203 116 116 0.3 0.25 111 68

Existing Active Oil (as of August 2010) 1 5,881 5,881 740 740 1.5 1.75 19,114 2,486

Total Existing and Projected Well Pads/Wells 6,084 6,084 857 857 19,225 2,554

Total Well Pads/Wells 11,795 13,419 1,458 1,635 36,631 4,499 Total Long-Term Disturbance

1 Minus projected abandonments during August 2010-December 2029 period.Table S3 : Annual projection of North Dakota Study Area Wells drilled from 2010 to 2029 and
their associated confidence interval.



### BASED ON 8,460 WELLS

YEAR LOW MEAN HIGH

2010 636 730 911
2011 507 571 696
2012 247 320 456
2013 86 173 341
2014 287 373 539
2015 334 413 566
2016 35 120 282
2017 429 491 608
2018 146 229 390
2019 209 294 457
2020 470 559 732
2021 76 157 313
2022 234 328 508
2023 365 452 621
2024 239 326 494
2025 510 611 810
2026 870 961 1,144
2027 435 517 678
2028 314 421 627
2029 311 414 620
Total 6,740 8,460 11,793Table S4 : Forecast of North Dakota Study Area annual and cumulative oil and gas production for 2010 through 2029.



### BASED ON 8,460 WELLS

YEAR ANNUAL OIL(bbls) CUM OIL (bbls) ANNUAL GAS(mcf) CUM GAS (mcf)

2011 52,661,468 104,598,238 82,906,807 163,574,512

2013 52,441,000 210,416,358 81,919,767 324,823,295

2015 56,314,876 321,620,453 84,868,270 494,839,730

2017 56,489,859 432,174,118 86,321,419 664,580,940

2019 58,260,262 547,442,269 87,516,299 838,990,613

2021 58,611,845 663,800,411 90,235,880 1,017,491,646

2023 59,999,859 783,588,600 88,881,716 1,194,681,350

2025 62,391,793 907,572,609 92,062,699 1,374,437,672

2027 62,883,936 1,031,988,789 88,995,794 1,551,850,172

2029 64,743,748 11,593,926,725 93,031,376 1,740,974,343 2010 51,936,770 51,936,770 80,667,706 80,667,706

2012 53,377,120 157,975,358 79,329,016 242,903,528

2014 54,889,219 265,305,577 85,148,165 409,971,460

2016 54,063,805 375,684,259 83,419,791 578,259,521

2018 57,007,889 489,182,007 86,893,375 751,474,315

2020 57,746,297 605,188,566 88,265,154 927,255,767

2022 59,788,330 723,588,741 88,307,988 1,105,799,634

2024 61,592,215 845,180,816 87,693,623 1,282,374,973

2026 61,532,245 969,104,853 88,416,705 1,462,854,378

2028 62,660,576 1,094,649,365 96,092,795 1,647,942,967