Bakken Oil Formation

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Bakken Oil Formation
Presented by
Century Energy LTD.
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Century Energy LTD.

• Century Energy Ltd (TSX.VCEY, PKCEYFF) is a
  junior oil and gas exploration company actively
  pursuing resource opportunities in North
  America. The company holds five leases adjacent
  to the Roncott / Bakken Oil Field, which is
  prospective for both horizontal and vertical
  drilling. Century Energy Ltd. has signed a
  farm-out agreement with TriAxon Resources Ltd. of
  Calgary for the drilling of a horizontal well
  before December 31st, 2008, on Century's acreage
  adjacent to the Roncott/Bakken oil field in
  southeast Saskatchewan.
• Please visit www.centuryenergyltd.com for more
  information.

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Bakken Geology

• Bakken Formation is comprised of 3 Members
• Upper Shale Member Source Seal
• Middle Siltstone Member Reservoir Migration
  Conduit
• Lower Shale Member- Source Seal
• Middle Member Depositional EnvironmentComplex
  Marginal Marine to Marine Shelf Environment with
  a variety of rock types ranging from shales to
  siltstones and fine grained sandstones, lime- and
  dolostones. (Described as a carbonate/clastic
  tug of war by Hess)

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James A. Peterson, University of Montana
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Bakken Comparison Canada / USA

• The Bakken zone is geologically and
  lithologically complex across the Williston Basin
  with numerous marginal marine depositional
  environments and resultant rock types
• Montana rock types represent carbonate bank
  deposits
• North Dakota, Saskatchewan, and Manitoba rock
  types represent a variety of marginal marine
  deposits
• The zone is about 10,000 feet deep in Montana and
  North Dakota, about 5,000 feet in Viewfield
  Saskatchewan and about 3,000 feet in Sinclair
  Manitoba

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• OOIP per section for the different areas is
  estimated to be in the order of 3 MMStb to 7
  MMStb
• The oil is light, at about 40 45 degrees API
• Permeabilities are in the order of 0.001 to 1
  millidarcy
• The fractured Bakken in North Dakota has initial
  rates of over 1,000 Bopd, the Montana Elm Coulee
  wells produce initially about 500 Bopd, the
  Viewfield wells commence at about 200 Bopd and
  the Sinclair vertical wells start producing at
  rates of about 50 Bopd

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• The deeper areas have lesser well density about
  2 Hz wells per section, or less, as compared to
  Viewfield with 4 Hz wells per section and
  Sinclair with 16 vertical wells per section
• Current Bakken production rates are estimated to
  be 130,000 Bopd from 650 wells in Montana, 70,000
  Bopd from 400 wells in North Dakota, 40,000 Bopd
  from 550 wells in Viewfield and 10,000 Bopd from
  725 vertical wells in Sinclair

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Viewfield BakkenReserve Estimation Methods

• Volumetrics Volumetric estimates using vertical
  well open hole logs, samples and core control
• Computer simulation work on the Bakken to assist
  in estimating solution gas drive recovery
  factors, potential interference effects between
  wells and the expected production profile
• Type curve analysis

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Viewfield BakkenReserve Estimates

• - OOIP 4 MMstb per section developed with 4 Hz
  wells per section 1 MMstb OOIP per well
• Recovery Factor of 10, 100,000 barrels of oil
  per well. 2P at 12.5, 125,000 barrels of oil per
  well, and 3P at 17.5, 175,000 barrels of oil per
  well.
• This represents the average well that has been
  used as an analogue. Reserves assigned to both
  drilled wells and offsetting locations will be
  dependent upon actual production characteristics
  of producing wells in the vicinity

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Reserves Evaluation Issues

• Extremely active, over 100 wells per month,
  public and confidential data
• A multitude of undrilled reserves, resource and
  prospective locations
• Short life performance history on the steep
  decline portion only long life lesser decline
  only a guess

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Reserves Evaluation Issues

• All wells are not type wells, sand is not a
  blanket (sink holes, crater features, areas of
  anomalous tighter or sandier sediments and
  structural components)
• All horizontal wells do not keep perfectly within
  the sand at an optimum position, nor do all
  fracture stimulations stay in the zone
• Even Packers Plus fracture methods are not the
  same due to different number of intervals and
  fluid type sensitivities

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Bakken Booking Methodology

• Until the advent of horizontal drilling and
  focused fracturing techniques, the Bakken oil
  play was limited to stimulated vertical wells in
  areas where the average permeability was in the
  order of 10s of millidarcies. Any other Bakken
  oil areas with low permeability were uneconomic
  to develop even though producible oil was
  established.
• The prospective resources in the Bakken play,
  both in the USA and Canada, could be very large.
  In April 2008, the United States Geological
  Survey assessed the mean undiscovered volume of
  oil in the Bakken in the Williston Basin area of
  Montana and North Dakota, combined, to be 3,650
  MMstb.
• Resources and reserves bookings in the Bakken
  will be done by analogy using type curves. The
  play lends itself to a statistical approach,
  taking into account available geological and
  production information.

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Bakken Booking Methodology

• Prospective resources will be rapidly upgraded to
  contingent resources or, more likely, to
  reserves, as wells are drilled.. The USGS
  considers the Bakken oil play to be largely a
  resource play
• Resource and reserves assignments will be
  dependent on geological and well control. A
  single successful oil well can result in a number
  of offset reserve and resource locations. A few
  strategically placed successful wells in an area
  can result in the booking of multiples of a
  single wells offset location potential.