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Brandon Sun - PRINT EDITION

Brimming with oil

Pumpjacks dotting the land near Waskada, Manitoba rise and fall during spring break up.

TIM SMITH / BRANDON SUN Enlarge Image

Pumpjacks dotting the land near Waskada, Manitoba rise and fall during spring break up.

As far as the eye can see, iron horses dot wheat fields in southwestern Manitoba, rocking back and forth as they slurp oil from hundreds of metres below the Earth’s surface.

The Bakken oilfields are located in the Williston Sedimentary Basin, a large area straddling the Canada-U.S. border and incorporating portions of southwestern Manitoba, southeastern Saskatchewan, most of North Dakota, the northwest corner of South Dakota and the northeast corner of Montana.

Enlarge Image

The Bakken oilfields are located in the Williston Sedimentary Basin, a large area straddling the Canada-U.S. border and incorporating portions of southwestern Manitoba, southeastern Saskatchewan, most of North Dakota, the northwest corner of South Dakota and the northeast corner of Montana. (MANITOBA MINERAL RESOURCES PETROLEUM BRANCH)

A comprehensive look at the number of wells drilled in Manitoba over the last nine years. There has been a dramatic shift to horizontal drilling over the same time period.

Enlarge Image

A comprehensive look at the number of wells drilled in Manitoba over the last nine years. There has been a dramatic shift to horizontal drilling over the same time period. (MANITOBA MINERAL RESOURCES PETROLEUM BRANCH)

In 2013, there were 530 wells drilled in Manitoba by 26 different companies. Tundra Oil & Gas, which also owns Red Beds, led the way with 189 wells drilled.

Enlarge Image

In 2013, there were 530 wells drilled in Manitoba by 26 different companies. Tundra Oil & Gas, which also owns Red Beds, led the way with 189 wells drilled. (MANITOBA MINERAL RESOURCES PETROLEUM BRANCH)

In 1951, the California Standard Oil Company discovered the first commercial, oil-producing well in North America’s Williston Basin and by Feb. 1 of that year, a well 15 kilometres west of Virden was pumping crude.

Since that initial discovery in a sedimentary basin that occupies portions of southwestern Manitoba, southern Saskatchewan, North and South Dakota and Montana., the province has had an on-again, off-again relationship with the oil industry.

After a decade of solid growth in the 1950s, the industry went cold until a boom during the back half of the 1970s and early ’80s.

The rush was short-lived, however, when global oil prices declined steeply as the world plunged into an economic recession.

Today, drilling and service rigs are flourishing on Westman’s prairie landscape, largely due to advances in drilling technology and oil recovery processes, combined with robust oil prices.

From 2005 to 2014, the industry has spent nearly $7 billion in the province, according to Keith Lowdon, director or the Manitoba Mineral Resources Petroleum Branch.

Nearly half (4,280) of the approximately 9,100 wells in the province’s oil history have been drilled over that same time period.

And of the wells drilled in the latest boom, one in three is a horizontal.

Horizontal drilling is the practice of laying drill pipe horizontal under the ground so that the well can snake through the production zone — often referred to as "pay dirt" — for several hundred metres to increase the amount of recoverable crude.

Geologists, on location, use samples, which are cuttings from the rock being drilled below the surface, to instruct the directional drillers to turn and twist the drill bit within the zone.

If the geologist sees too many cuttings from the formation directly above the "pay dirt", they will turn the bit downward and visa versa if samples begin to turn up rock from the formation below.

The attraction of horizontal drilling over traditional vertical drilling is the level of production.

Initial production for vertical wells is between 15 to 50 barrels per day, while horizontal wells can produce 300 barrels. And while the initial rates of production tend to be exaggerated, horizontal wells still settle into an average production rate approximately double to quadruple that of a vertical well.

In 2012, horizontal wells accounted for nearly 80 per cent of the province’s total production. With an average price of $84.53 a barrel that year, Manitoba sold approximately $1.51 billion worth of light, sour-blend crude.

There were 614 wells drilled in 2012, of which 566 were horizontal wells. Of these wells, 506 were cased as potential oil producers, while 12 were abandoned dry — called "dusters" in the field.

Drilling advances, combined with hydraulic fracturing or "fracking", have more than doubled the province’s oil production, according to Lowdon.

Fracking is a recovery technique wherein water, chemical and sand are injected into the well at high pressure to create small fractures in the surrounding rock formations, thus freeing up oil and gas to move into the well bore.

The advances in technology are expected to keep the oilpatch strong for the foreseeable future in Manitoba.

"In this industry things can change on a dime, so it’s hard to do long-term forecasting," Lowdon said. "But we expect to see the same level of activity for the next number of years."

» ctweed@brandonsun.com
» Twitter: @CharlesTweed

Republished from the Brandon Sun print edition June 19, 2014

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