Dick Findley has two pieces of advice for working petroleum geologists.
You’ll want to pay attention.
Findley opened up a Bakken formation play that led to development of the giant Elm Coulee oil field in eastern Montana.
The field now produces almost 50,000 barrels a day of high-quality crude.
By his estimate, Elm Coulee’s total output will reach 200 million to 250 million barrels.
In April, Findley received AAPG’s Outstanding Explorer Award.
During the same month, his likeness ended up on the cover of the Wall Street Journal.
Here’s his first advice:
You have to think big to see big.
“If you get focused on a small trap, that’s all you’re going to see,” he said. “You’ve got to step back and see the big picture.”
On Goes the Switch
Findley, a member of AAPG for more than 30 years, speaks directly from experience.
His work in the Bakken dates back to a shale play in the 1980s.
“That play, in my opinion, got pretty badly over-developed,” Findley said. “It turned out there were just a couple of sweet spots.”
So the linked phrase “Bakken shale” became familiar to the industry, and not always in a good way.
In the Williston Basin, the Mississippian-Devonian Bakken extends from eastern Montana across most of North Dakota and into Canada.
The upper and lower Bakken shale member has organic-rich source rock, with as much as 14 percent organic carbon. Lots of people knew the Bakken contained some oil.
But everyone thought it was too difficult to produce, and too limited to be commercial.
By the late 1980s, Findley had started his own small exploration company, Prospector Oil Inc. The Bakken was one of the formations he chose to re-evaluate, but without great enthusiasm.
“I was looking for bypassed pay on small closures at that time,” he said.
The Devonian Nisku appeared promising to him, and a relatively under-explored stratigraphic trap in Richland County, Mont., seemed like a good prospect.
“It was fairly well-defined when I started out,” Findley said. “However, the updip trap was not well-defined. There was a large gap in control.”
Few geologists saw the Bakken as a target: “People thought of the Bakken as a re-entry, bailout zone,” he noted.
But drilling disclosed good porosity and a likely oil zone in the formation’s fractured-dolomite middle section, between upper and lower shale layers.
“I was surprised there was porosity in the middle member. When we went down into it, we had a really good drilling break,” Findley said.
“That was a light-bulb moment for me.”
A Tiger By the Tail
Findley discussed the potential new play with a partner in Michigan.
“My partner asked a very profound question. He said, ‘Do we have any place to develop this idea?’” he recalled.
Starting to the south, Findley searched out existing control to see if any other well showed the same Bakken porosity.
“This porosity in the middle member turned out to be present in all the wells I looked at in that direction,” he said.
Findley thought he’d been petting a kitten, but he had a tiger by the tail.
He knew the upper Bakken held world-class source rock. Now he had unveiled a zone with good porosity, high resistivity and low water saturation.
“Looking through the literature I found some depositional models where a shoreface model was proposed for the Bakken,” he said. “It looked like a big marine bar just offshore.”
Findley began studying porosity readings and indications to determine the extent of the play area.
“This is a very unique porosity zone. I’d been working this basin coming up to 25 years at the time, and I didn’t know there was porosity in the middle member,” he said.
“If I made one mistake, I used too high a (porosity evaluation) cutoff. I think I used 8 percent as a cutoff,” he added.
When he started the Richland County work, Findley was convinced he had a promising 320-acre stratigraphic trap to explore.
He needed to think bigger.
Now the potential productive area grew to 12 miles wide and 50 miles long.
And talk about irony.
The overall size of the prospect excluded his company as the sole player.
Findley concluded that leasing would require an initial $2 million cash, with more money needed for the first tests -- an impossible financial hurdle for his small company.
Bad News, Good News ...
As every playmaker geologist knows, the magic isn’t in putting together a prospect. The miracle is in getting one drilled.
Findley needed backing. At that point, fate, luck and timing collided.
An industry contact of Findley’s had been working with Bobby Lyle, head of Dallas-based Lyco Energy Corp. He thought Lyle’s independent operation might be interested in the Montana play.
“The first thing I had to tell Lyco was, ‘I have a Bakken play -- but it isn’t shale!” Findley said.
“For most of its history, the Bakken, except in the 1980s and 1990s, was not seen in a very good light, so it was not a formation most workers would have focused on,” he noted.
When he flew to Dallas to meet with Lyle, an all-day marathon meeting ensued, Findley recalled.
Lyle “asked his staff to stay over that same night to do due diligence,” he said, and a deal quickly came together.
In 1996-97, Lyco began to examine the Bakken play’s potential with 10 vertical wells. Out of those, seven reached the formation and three failed, Findley said.
Timing and chance intruded again.
“In 1997 there was the most precipitous price drop in the history of the basin. Oil went down to $8.50, I recall,” he said.
Lyco suspended work, and “looking back, that was probably the best thing that could have happened to us,” Findley added.
The partners had one heck of a reservoir, and Findley was convinced that oil “filled every pore space of the middle member.”
But how to get it out?
The Race Is On
In a story filled with twists and turns, luck favored the partners once again.
“We went to Halliburton and asked them to develop a frac. They had actually been doing a study looking at the Bakken,” Findley explained.
“It turns out Halliburton thought there were no swelling clays, and they recommended using water,” he said.
In addition, Halliburton drew on horizontal drilling expertise to tap the oil zone. That greatly expanded the area of the middle member available for fracturing.
By 2000, Halliburton had invested its own money in the Bakken hunt, the first horizontal well was drilled in Findley’s play, and oil began to flow.
Debates continue about the most effective development tools for the formation.
“It’s still somewhat controversial, but based on the data we see, I think fracturing is just a small part of the reservoir,” Findley said.
No one doubts the success of the basic approach, however. Drillers piled into the area, which should see more than 100 new wells this year.
Estimates of total oil in place in the Bakken oil play range into the hundreds of billions of barrels, so the race is on to extend Findley’s concepts.
Finally, Keep It Simple
Only a short hike separates his Elm Coulee find from the Montana-North Dakota border. Because the Williston Basin Bakken can be found in most of North Dakota, interest in that state has soared.
Findley also looked into prospects there, without getting over-excited.
He sees more localized plays in North Dakota, and “a very large learning curve” to develop the Bakken as a resource.
“I came to the conclusion there was not another Elm Coulee in North Dakota, but that’s not to say it has no potential,” he commented.
Other operators are working the fringes of the Montana play, hoping to extend it.
Another irony: After its big success with Bakken production, Lyco Energy couldn’t last long as an independent.
In July 2005, Enerplus Resources Fund of Calgary announced it would acquire Lyco for $421 million.
Elm Coulee has been called a “sleeping giant” because its potential went overlooked for so long. Findley finally changed that with a sound geological approach, backed by proof from the drillbit.
Here’s his second piece of advice:
The other thing I’ve learned to do in my career is to keep things simple.
In the end, the working geologist has to keep going back to the vocabulary of reservoir, trap, seal and source, according to Findley.
Focus on those fundamentals, and you should be able to stay in business as a small exploration company.
Until you start thinking big.