Some coverage on the amounts in Bakken. More than it appears.
How a Starving Geologist Found the Largest Oil Field in Modern History
"Bakken is almost twice as big as the oil reserve in Prudhoe Bay, Alaska. " — Harold Hamm, founder & CEO, Continental Resources
A few years ago, a Billings petroleum geologist by the name of Dick Findley was working out of his basement, searching for oil in an area that had been barren for over 20 years.
Things were rough, and he was struggling to get by. He even flirted with the idea of getting a second job as a restaurant cook... and on a diet of nothing but Ramen Noodles and hard-boiled eggs, who could blame the guy?
But one thing kept Dick going: a conviction that this area — the Bakken oil field — held billions of barrels of recoverable light, sweet crude.
And through sheer luck, he and his partner stumbled upon a porous layer of dolomite 9,000 feet below the ground of a ranch just outside Sidney, Montana.
Bakken Oil Wells: World’s Most Profitable Oil Investment
Right now, a Bakken oil well is one of the world's most profitable investments — for individual investors and oil companies alike.
So let's dig into some numbers, because I want to show you exactly why this $6 stock is about to jump 220%...
North Dakota oil drillers produced a record 152.9 million barrels of crude in 2011, up more than 35% and nearly 40 million more barrels than the previous record set a year earlier.
More than 95% of the state's oil production comes from the Bakken and Three Forks.
Almost 200 rigs are drilling in the Bakken; state and industry officials say 99% of them hit oil.
A typical Bakken oil well costs between $8 and $10 million. That includes leases, royalties, and initial operating expenses.
The average Bakken well will produce about 540,000 barrels of oil during its 29-year lifespan.
At current prices between $85 and $100 per barrel, we’re talking about a sweet $45 million in revenue for each Bakken oil well.
"We can look at each well as a driver for the economy... It's also a good investment." — Alison Ritter, Department of Mineral Resources
And that makes new discoveries — like North Dakota’s Bakken oil field, with a confirmed 7.4 billion barrels (and as much as 24 billion barrels) of recoverable oil — pure gold for individual investors.
You see, the Bakken oil play is not new. In fact, geologists have known about it since the 1950s...
Shell Oil even tried drilling there in the 1970s, but the company wasn’t able to get enough of the high-grade light, sweet crude out of the ground to make the venture worthwhile.
The earliest estimates were that the layered shale of the Bakken Formation held a whopping 500 billion barrels of oil. But as Shell proved, getting that oil was a whole different story.
The Niobrara Shale Play – the Next Bakken?
February 2nd, 2013
The Niobrara shale formation extends across northeastern Colorado, northwestern Kansas, southwestern Nebraska and southeastern Wyoming. The play ranges in thickness from 275-400 feet deep, with three primary carbonate-rich benches that average 10-25 feet thick with 5-10% porosity
To date, most of the Niobrara’s O&G development focuses on the Denver-Julesburg Basin (“DJ Basin”), with hot spots in the Wattenberg field of Weld County, Colorado, and (to a much lesser degree) Wyoming’s Silo field. Niobrara operators face unique challenges in this formation, but remain hopeful because of new estimates on overall production expectations over the next few years.
Unique Challenges for Oil & Gas
Niobrara’s geological characteristics can impede effective, economical drilling. The formation transitions from limestone to chalk to calcareous shale to sandstone, each with differing depth and thickness. Navigating drills in the thin layers is difficult, and high clay content of the formation makes it less permeable than other areas and complicates extraction.
The variable natural fracturing occurrence that results from the geological variety also impacts successful drilling. Operators seek sections that experience high natural fracture density, which are likely more productive and easier to tap, versus reservoirs with lower fracture density that yields higher water cuts and lower productivity. Early interest has yielded select highly explored drilling areas; however operators face challenges finding suitable locations for new horizontal wells that won’t interfere with existing vertical wellbores.
Water has proved an additional impediment in the Niobrara, from industry and environmental standpoints. The hydraulic fracturing process that revolutionized shale drilling requires high volumes of water. Summer 2012’s severe drought and rampant wildfires in Colorado rendered water scarce and forced O&G operators to spend more on securing access to water from the Colorado River.
Output Results Thus Far
The complexity of the Niobrara petroleum system complicates cumulative data, but estimates show that almost 2 billion barrels of oil equivalent have been produced from the Wattenberg field alone. EOG Resources’ “Jake 2-01h” drilled its first well in 2009 in northern Colorado, producing 50,000 barrels of crude oil in the first 90 days and maintaining outputs of 50,000 barrels per month. Noble Energy’s “Gemini” entered Weld County in 2010 and produced 1,100 barrels per day at its peak.
After a strong start, however, output has been less than predicted. In Weld County, for example, the first half of 2012 produced 11.5 million barrels of oil and 101.4 million cubic feet of gas. This compares to 26.5 million barrels and 238.4 million cubic feet, respectively, in 2011.
Despite lower outputs than expected, interest in the Niobrara play remains high. Notably, the O&G leaders in the play are independents that plan to continue or expand their drilling and E&P programs. As of August 2012, 45 rigs were active – four more than in 2011. New estimates now say that the play is a third bigger than first thought, capable of producing as much as 3.6 billion barrels of oil over the next several years.
An ASD Report estimates that production will pass 3 billion barrels by 2020.
The table below gives a sample of independents with a stake in the Niobrara. As you can see, future plans for the play show increased production going forward.
Although the geology of Niobrara presents challenges, operators are working around them to increase production in the area, and the forecast for this shale play is expected to increase.
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http://wyomingenergynews.com/2013/02/th ... xt-bakken/
On the Windhexe: ''An engineer could not have invented this,'' Winsness says. ''As an engineer, you don't try anything that's theoretically impossible.''