Do you know which shale oil reserves produce the most recoverable oil in the US today? Would you believe the two zones known as the Bakken, and Three Forks Shales in North Dakota? These prolific Bakken shale zones are located within a 200,000 square mile area where North Dakota, Saskatchewan, and Montana contain these oil reserves that major oil companies and large independents drill for each day, or 24/7.
You can play in the ‘New Ibara Shale’ in New Mexico, and Colorado, the ‘Eagle ford Shale’ in Dallas County, Texas, or the ‘Marcellus Shale’ in Pennsylvania, and West Virginia, and if you can find working interest, in the ‘California Shale’ oil in Taft, and Bakersfield, California; but they all fall short of the ‘consistent’ returns investors get on investments found in the Bakken & Three Forks Shale of North Dakota. This is why the major oil companies, big independents & Operators plus over 150 drilling rigs work daily in the fields of North Dakota.
So, if you want to own direct working interest overrides in leasehold acreage, and new wells drilled on your purchased fractional ownership share of the acreage owned by the majors and big independents who as Operators also own the majority interest, and who put-up the bulk of the investment dollars to drill 6-8 new horizontal wells on standard 1,280 acre spacing units, just let me know!
We work with professional landsmen, and directly with owners of acreage where new wells are drilled each day in the best counties to find large reserves of oil. Tax write-offs are superb in drilling programs, and you can take advantage of the big 85% first year IDC write-offs if you invest on or before December 31, 2013.
The Bakken formation is the oldest and most sound source of crude oil in North American history.
The Bakken formation is the oldest and most sound source of crude oil in North American history. This unconventional, tight reservoir in the Williston Basin has become a major producer in recent years due to advances in drilling technology. Shale that was generally considered inaccessible due to its low porosity and permeability has become unlocked by horizontal drilling and hydraulic fracturing (fracking) technologies. The tight oil boom has reversed a decline in North American production, and has also become a significant new source of energy worldwide.
On April 30, 2013, the United States Geological Survey (USGS) released exciting results from its most recent assessment of the Bakken formation. The USGS now estimates that at least 7 billion barrels of oil and 6.4 billion cubic feet of natural gas could ultimately be recovered from both the Bakken formation and the Three Forks formation found directly below. This represents twice the amount of oil and three times the amount of natural gas that was estimated in the last USGS assessment in 2008. These numbers likely did not come as a surprise to operators in the area, but instead confirmed what they suspected all along.
Numerous companies have a stake in the Bakken formation’s vast production potential, but there are some, in particular, who are dominating the play and carving out a very large piece of the Bakken pie for themselves. They are the following companies:
Continental Resources, Inc.
The largest producer and leaseholder in the Bakken is Continental Resources, which pioneered the Bakken Shale play and was one of the first companies to implement horizontal drilling and hydraulic fracture stimulation technologies. At present, Continental is operating 22 rigs across its industry-leading leasehold position of approximately 1.2 million net acres in the Bakken play. In the first quarter of 2013, gross operated average production in North Dakota and Montana reached a milestone of more than 100,000 BOE (barrel of oil equivalent) per day.
Continental has established the ECO-Pad drilling technique. This process enables them to drill four wells from a single drilling pad, while other companies use a single-pad technique. This allows the company to harvest more of a reservoir’s resources while reducing the environmental impact.
Whiting Petroleum Corporation
Since being founded in 1980, Whiting Petroleum has been an independent oil and gas company that acquires, exploits, develops, and explores for crude oil, natural gas, and natural gas liquids. The company is generally credited with the discovery of the highly productive Pronghorn Sand zone in the North Dakota Williston Basin. Whiting has since become the number two producer in the Bakken with nearly one million lease acres in the play. They reported a record total production in 2012 of 82,540 BOE per day, an increase over the 2011 results.
Whiting’s field strategy is focused on two types of development: finding new zones to exploit and increasing the density of wells on existing production. Currently, the company has plans to test an untapped and highly prospective oil formation within the Bakken known as the Lower Bakken Silt. Extensive sampling has identified high oil in place and the potential for significant increases in their Bakken reserves.
EOG Resources, Inc.
Formed in 1999, EOG Resources made its mark in the Bakken in 2006 when exploration of the Parshall Field in Mountrail County, North Dakota, led to the most prolific discovery in the play. The company has since expanded its development to other areas of the Bakken. EOG is one of the largest producers in the Bakken Shale and has become a leader in horizontal drilling and well completions through innovative completion techniques. The company is presently seeing results from its ongoing 160-acre downspacing in addition to the development of new fracking techniques. EOG is confident that they will continue to be an industry leader in the Bakken with many years of excellent drilling ahead of them.
Hess Corporation was formed in 1933 by 19-year-old Leon Hess with one used truck to deliver residential oil in New Jersey. Today, Hess is an international company with refining and retail operations in 23 countries. Hess holds a strong position in the North Dakota Bakken Shale with 800,000 net acres in the Williston Basin. They have made significant investments to develop the Bakken, and have become the largest gas producer and the third-largest oil producer in the state. Production in the Bakken for 2013 is expected to average between 64,000 to 70,000 BOE per day. As of the first quarter, they are off to a solid start, averaging 65,000 BOE per day.
Statoil is an international energy company built on 40 years of experience from oil and gas production on the Norwegian continental shelf. The company presently has operations in 35 countries worldwide. In 2011, Statoil acquired the Brigham Exploration Company, securing the Bakken and Three Forks oil plays in North Dakota and Manitoba. The company now has ownership of 378,000 net acres in the play, and has become among the most active drillers and a top-five leader in production.
While this is the company’s fastest-growing region in North America, they maintain that their philosophy with respect to onshore production is to move slower rather than faster. Statoil is a long-term investor, preferring to avoid the “super-high” production peaks followed by “super-high” decline rates. While the company has not publicly set out 2013 production goals, in 2012 they doubled their production from the previous year to 47,000 BOE per day and are looking forward to a net production increase for this year.
Production numbers in the Bakken formation continue to climb each year. Combined with advances in drilling technology, these conditions create even greater potential for major operators in the region. Current fracking techniques like extended horizontal drilling and multiple fracturing of these horizontal legs now allows about 50 percent of oil in place to be recovered and produced, up from only 10 percent within the last ten years.
With the Three Forks formation now in their sights, companies operating in the Bakken can look forward to a very prosperous future, knowing that there is still enormous, untapped potential right on their doorstep.
Bakken shale production will surprise Wall Street, Goldman Sachs says
September 24, 2013, 11:53 AM
By Claudia Assis
North Dakota’s Bakken shale formation will surprise investors, analysts at Goldman Sachs wrote in a note Tuesday.
“We came away from our trip to North Dakota last week with greater confidence in our outlook that Bakken production/completion activity will likely exceed Street expectations,” the analysts said.Goldman picked favorites among oil exploration and production companies exposed to the Bakken: they initiated coverage of Continental Resources Inc. CLR -3.19% and Oasis Petroleum Inc. OAS -1.66% , rating both a buy based on their growth potential and valuation. They set a price target of $130 on Continental stock and $65 on Oasis Petroleum stock.
Other firms ready to reap the Bakken benefits are refiner Northern Tier Energy LP NTI -2.68% , oilfield-services firm Halliburton Co. HAL -1.27% , and transportation and pipeline companies Canadian Pacific Railway Ltd. CA:CP and Enbridge Inc. ENB -1.61% .
Northern Tier’s price target was set at $30 a share, while Halliburton’s target was $63 a share. Enbridge and Canadian Pacific’s targets were 54 Canadian dollars and 144 Canadian dollars, respectively.
During the Goldman trip, producers and drillers were “uniformly confident” in resource expansion, efficiency gains, and potential for improving well performance in the coming years, the analysts said. Production “can continue to grow substantially,” easing concerns that emerged after moderate growth in the first half of the year, they said.
“We see production growth of [130,000 barrels a day to 210,000 barrels a day] through 2016,” above the average of 110,000 barrels a day for the six months to July, they said.
Goldman spread the love to other shale formations: U.S. oil production growth will be driven by Bakken, which straddles North Dakota and Montana, south Texas’s Eagle Ford, and west Texas’s Permian, they said. Colorado’s Wattenberg, while also favored, will have less of an impact, they said.
For natural gas, the Marcellus Shale and associated gas from the above plays will be the drivers, they said.
Prosperous play’s new oil estimates could influence pipeline plansNathanial Gronewold, E&E reporter
EnergyWire: Wednesday, May 1, 2013
HOUSTON — The resource potential of the booming Bakken Shale oil and gas zone is much bigger than previously thought, U.S. government geologists announced yesterday.
A new assessment of oil and gas reserves in that region by the U.S. Geological Survey concludes that industry could have access to almost double the amount of hydrocarbons previously calculated in parts of North Dakota, South Dakota and Montana. That rapid increase in the reserve estimate comes mainly from a first-time assessment of the Bakken Shale’s sister geologic zone underlying it, the Three Forks Formation.
The finding could have major implications for future oil and gas industrial activity in the region, particularly for pipeline companies.
A longer lifetime for Bakken exploitation may boost the economic attractiveness of building the vast majority of the controversial Keystone XL pipeline project entirely in the United States, with or without a green light from the Obama administration. But the recent cancellation of a competing Bakken pipeline project could suggest otherwise.
TransCanada, the company proposing the massive Keystone XL project, has already indicated that the line would also be used to carry Bakken crude south to the Texas Gulf of Mexico coast. Overdependence on rail for moving oil out of Bakken fields has producers eager for new pipeline capacity, but the possibility of building just the U.S. segments of the Keystone XL pipeline, which would require no formal approval from the federal executive branch, is still only a vague idea that the company has not committed to.
Combining the Three Forks and the Bakken together, USGS now believes the region holds approximately 7.4 billion barrels of undiscovered, technically recoverable crude oil. That about doubles the initial assessment the agency made back in 2008.
USGS scientists believe that the Three Forks Formation, which is deeper than the Bakken, is likely actually larger than the Bakken Shale, the formation that has been the target of drilling during most of North Dakota’s recent oil boom. The government estimates that Three Forks holds about 3.73 billion barrels of recoverable crude oil, compared with 3.65 billion barrels for the Bakken Shale.
During a call to announce the new findings, Interior Secretary Sally Jewell called the findings “important information as we continue to reduce our nation’s dependence on foreign sources of oil.” Though some industry sources have produced higher estimates, Jewell indicated that Interior trusts USGS’s calculations.
“This represents sound science by U.S. Geologic Survey scientists using the best available data, which includes data from industry, the state of North Dakota and Montana,” Jewell said. USGS’s second look at the Bakken region “is based purely on science and the best available information, and that’s what this represents,” she added.
The government’s geological agency also increased its estimate of the natural gas potential for the region. USGS said the Bakken and Three Forks combined likely hold about 6.7 trillion cubic feet of recoverable natural gas, also about double the figures arrived at in 2008.
Three Forks now a factor
The 2008 Bakken geologic assessment did not include Three Forks, mainly due to the lack of apparent interest in it on the part of drillers back then.
“In 2008, there were almost no wells in the Three Forks, so no one really knew it was going to be productive at that time,” said Stephanie Gaswirth, the lead author of the newest USGS assessment, during a telephone interview. “They didn’t know that the Bakken oil had migrated that deep into it, and so I think that was part of the reason.”
Three Forks is also more difficult and costly to exploit than the shallower Bakken Shale. But the oil and gas industry is still finding ways to make it profitable as companies have enhanced and improved their horizontal drilling and hydraulic fracturing capabilities.
“It’s geologically different in that the reservoirs are mainly in a very fine-grained tight dolomite reservoir,” Gaswirth said. “They’re pretty different depositional environments.”
North Dakota oil and gas regulators reported this month a preliminary statewide oil production of nearly 780,000 barrels of oil per day on average in February, up from about 738,000 barrels per day in January. The North Dakota Pipeline Authority says that 20 percent of the crude oil moved out of the Williston Basin — which encompasses the Bakken and Three Forks — was carried in pipelines, while 71 percent of it was transported out on rail cars.
The Keystone XL tie-in
The main section of the new Keystone XL line that TransCanada wants to build would extend from Hardisty, Alberta, to Steele City, Neb. The southernmost portion is under construction now, a line running from oil storage facilities in Cushing, Okla., to Nederland, Texas, with an extension to Houston and its Gulf refineries.
The northern route passes right through the Bakken and Three Forks oil fields, in eastern Montana. Jeff Share, editor of Pipeline & Gas Journal, said that this routing was strategic.
“TransCanada made plans a couple of years ago to scoop up as much of that Bakken oil as they can so Keystone would tie into that region,” he said in an email. “The producers up there have been hamstrung because there is no major pipeline out of that region so they’ve had to resort to rail, especially to get it to the East Coast refineries.”
Last year at a pipeline industry conference, Les Cherwenuk, a project director at TransCanada, told E&E that his company had no separate plans to build much of the northern route of Keystone XL to tie into Bakken output. He indicated that his company was intent on winning final approval from the U.S. government for the entire project and that no alternative plans would be pursued until after the Obama administration made its final decision.
Share speculates that building the line anyway, without crossing the border, may be one option for the company. Doing so would only require permission from state governments and permits from the Army Corps of Engineeers.
“TransCanada has always been a step ahead of everyone in looking ahead at transportation possibilities, so obviously they do have a backup plan in mind,” he said.
But building Keystone XL from Montana to Nebraska may depend on the willingness of producers in the United States to help pay for it through contractual agreements. One project has already been scuttled because that willingness wasn’t there.
One year ago, Tulsa, Okla.-based ONEOK proposed a $1.8 billion pipeline project to carry Bakken-region crude oil to Cushing. Last November, the company announced it was scuttling those plans, citing a failure to ink long-term contracts with oil shippers.
Bakken Shale Oil Formation
Latest Bakken News
Tue, Nov 19, 2013
Western Refining Investing in the Bakken Through Minnesota Refinery
Mon, Nov 18, 2013
ND Oil Production On Pace for More than 1 Million b/d by Year-end
Fri, Nov 15, 2013
Is the Bakken Boom Getting Boomier? – Video
Thu, Nov 14, 2013
QEP Resources Bakken & Three Forks Production Surpasses 21,000 boe/d Wed, Nov 13, 2013
NDPA Natural Gas Report – Progress Made in Bakken Flaring Fight
Tue, Nov 12, 2013
Continental’s Bakken & Three Forks Density Test Yields Almost 15,000 boe/d
Fri, Nov 8, 2013
Bakken Rig Count Flat at 173 – Operators Seeing Improvements – Nov 8, 2013
The Bakken Shale ranks as one of the largest oil developments in the U.S. in the past 40 years. The play has single-handedly driven North Dakota’s oil production to levels four times higher than previous peaks in the 1980s. As of 2012, ND is second to Texas in terms of oil production and boasts the lowest unemployment rate in the country at ~3%.
The Bakken Shale Play is located in Eastern Montana and Western North Dakota, as well as parts of Saskatchewan and Manitoba in the Williston Basin. Oil was initially discovered in the Bakken play in 1951, but was not commercial on a large scale until the past ten years. The advent of modern horizontal drilling and hydraulic fracturing helps make Bakken oil production economic. The U.S. Geological Survey has estimated the Bakken Shale Formation could yield 4.3 billion barrels of oil and estimates from Continental Resources stretch as high as 40 billion barrels.
The name “Bakken” originates from a North Dakota farmer, Henry Bakken, who owned the land where the first well encountered the Bakken formation.
Bakken Shale Geology
Bakken Shale Map
Bakken Shale Map | Click to Enlarge
The Bakken Shale is a rock formation that was deposited in the late Devonian, early Mississippian age. The formation consists of three layers: an upper shale layer, middle dolomite, and a lower layer of shale. The shale layers are petroleum source rocks as well as seals for the layer known as the Three Forks (dolomite) or Sanish (sands) formations.
A 2008 USGS study pegged recoverable reserves at approximately 4 billion barrels and a 2010 NDIC study estimates the underlying Three Forks formation could yield an additional 2 billion barrels. Both estimates are likely conservative. The Bakken is estimated to hold as much as 400 billion barrels of oil equivalent in place. Four billion barrels only represents 1% of the oil estimated to be in place, while current recovery estimates range from 3-10%. Continental Resources has publicly expressed beliefs the Bakken will yield anywhere from 24-40 billion barrels. If you’d like to read more, visit our Bakken Geology page for additional information.
Bakken Shale Companies
While the Bakken experienced multiple small scale booms over the past 60 years, it was a horizontal well drilled in the Elm Coulee Field by a partnership between Lyco Energy and Halliburton that incited our modern boom. The Elm Coulee was proven economic in 2003 and operators began expanding into North Dakota after EOG’s Parshall discovery in 2006. The play was driven by innovations and small to mid size exploration and production companies. If you’d like to read more about the various operators in the play, visit our Bakken Companies page.