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:
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.
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.
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.
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