NYSE: DNR

Completion Practices in the Bakken October 31, 2011 SPE – ATCE

Pat Handren

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Oil Prices & Bakken Rig Count

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NORTH DAKOTA RIG COUNT / NYMEX $ (Crude Oil)

Rig Count Provided By: Infogram of the Dakotas

$84.83

As of 10/14/11

2008 2009 2010 2011 Avg NYMEX Crude

7/11/08 $142/bbl

11/14/18 96 rigs

4/29/11 $113/bbl

9/2/11 201 rigs

1/2/09 $39/bbl

5/8/09 32 rigs

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ND Production History

From NDIC website

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Williston Basin: Bakken System

● Bakken Rocks!

~8% Porosity, Micro Darcy Permeability

High Perm is Bad

MB < 40’ thick, TFS < 250’+

11% TOC (4% was considered world class)

Fractures: Structural related tectonic, stress related regional, expulsion fractures

associated with over pressuring due to hydrocarbon expulsion.

Over-pressured due to hydrocarbon generation.

Most oil generated stayed in the MB member, not to the Lodgepole

400+ Billion bbls generated from Bakken Shales

3.65 billion bbls recoverable oil, 1.85 trillion ft^3 natural gas, 148 million bbls NGLs

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Williston Basin Bakken Formation

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Williston Basin

Early 2008 Early 2011

3800 wells with

120+ new wells

added monthly.

Covering over

25,000 sq. mi.

● History

1953 – 1960

56 vertical wells targeting both zones (209 BOPD avg IP)

Some have cumulative production over 1,000,000 bbl oil to date

1961 – 1976

Billings Nose “Bakken Fairway” on South west side of the Basin

Bail out zone to Red River

1987 - 2005

Horizontal drilling in the shale along the Fairway & Elm Coulee

225 wells: 86 BOPD IP yielding 145 MBOE

2006+

Parshall Discovery Well

3,000 wells later……

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Williston Basin Bakken Development

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Williston Basin

From Continental Resources Presentation

Plug and Perf Staging

Perf, Frac, Plug – Repeat – Perf, Frac, Plug – Repeat… - Perf, Frac

Flow back and hope it does not plug off…

It’s dark down there

– so who really

knows what is

happening?

Plug and Perf Staging

Perf, Frac, Plug – Repeat – Perf, Frac, Plug – Repeat… - Perf, Frac

Flow back and hope it does not plug off…

Ball and Sleeve Staging

Frac, drop ball, frac, drop ball…frac.

Ball and Sleeve Staging

Frac, drop ball, frac, drop ball…frac.

Flow the well and flow the balls back too!

Ball and Sleeve Staging

Frac, drop ball, frac, drop ball…frac.

Flow the well and flow the balls back too!

Still dark…

Standards Set by “The Industry”

● Interval Length

>350’

● Completion Method

Plug and perf (use your imagination - $$$ and time limited)

Ball and sleeve (up to 40 entry points)

Combination (up to 54 stages)

● Proppant and Fluid Volumes

100-125,000 #/stage

● Sand (100 mesh, 40/70, 30/50, 20/40)

● Ceramic (40/70, 20/40, 12/18)

● Mix

1500-2000 bbls/stage

● Slick water

● Linear gel

● Cross-linked

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Questions that NEED to be Answered

● Issues with closure stress and conductivity needs?

Is closure stress consistent from tip to the wellbore?

How much conductivity is necessary for 100 BFPD/fracture?

● Effects of cyclic stresses?

Are we seeing the effects of pressure cycling?

How are refracs restoring production?

● How much of the Fracture is actually cleaning up?

To the tip?

Beyond?

● How can we satisfy our proppant needs?

Competition with other shale plays, who wins?

Buy our own sand mines?

● Where are we going to get/dispose of the water for/from fracturing?

Where does all the water from Lake Sakakawea?

What can we do with the produced water?

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Bakken EUR – Type Curves (Elm Coulee)

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“…neither geologic nor reservoir properties can be predicted at a specific well

location….both reservoir geology and completion efficiency are sufficiently complex

as to be unpredictable from one location to another location. Consequently,

predicting the performance of any particular well prior to completion is virtually

impossible.” (SPEE Monograph 3)

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Williston Basin Bakken Development