Bakken Area The New Saudi Arabia?
While recent advances in heavy oil recovery have proven useful in bringing the highly viscous liquid to surface, the United States Geological Survey (USGS) estimates of Bakken Formation hydrocarbons released April 10 are being met with a ticker-tape parade, as well as a tad bit of skepticism.
"It's not a silver bullet," said USGS scientist Brenda Pierce, "but it is very substantial."
As operators wait to "digest" the information offered by the USGS, some in the industry are giddy over the possibilities.
One intrepid industry writer has even named North Dakota "the next Saudi Arabia."
Still, many of the current operators contacted by Rigzone said it will take time to determine how much of the reserves reported are commercially viable.
The disbelief in the so-called inflated numbers was rebuffed by a North Dakota Department of Mineral Resources representative, who said that the methodology of the USGS should not be undervalued since they use the best-available practices with plenty of assistance from independent operators and engineers.
As one of the largest operators in the area, Marathon Oil said it is continuing on its current path with the plans it previously had in place before the USGS report.
Marathon spokesperson Lee Warren told Rigzone that Marathon has "long-term plans in the area," but at this time there will be no changes based on the USGS estimates. Since the company has not had time to review the USGS report, Warren said Marathon was not yet prepared to issue a response to the estimates.
Marathon holds 320,000 net acres within the expanses of the Bakken Formation, located in North Dakota and eastern Montana. According to the company's web site, the acreage "has the potential to add more than 20,000 net barrels of oil equivalent per day of production by 2012."
Altogether, Marathon anticipates drilling approximately 300 wells over the next five years.
"The company draws upon its extensive experience in reservoir characterization, horizontal drilling, well stimulation, and commercial and marketing expertise in the Rocky Mountain Basins to leverage this substantial position in the Bakken Formation," Marathon stated on its Bakken holdings.
In "Delivering America's Energy Security," Marathon Senior Vice President Worldwide Production Steven Hinchman, addressing a largely North Dakota audience at the Great Plains Energy Exposition, said "North Dakota has an important role to play in how we approach the challenges of delivering America's energy security and how we can remain competitive in the global race for energy."
Production in the Bakken Formation is not your typical operation. Characteristically, the highly organic black shale source rock encases a 30 to 70 foot sandy dolomitic horizon. Wells are usually drilled to 10,000 feet of true vertical depth before extending horizontally 10,000 feet or further.
Other operators in the area are digging in for the long haul also.
Hess Corporation also has big plans for Bakken in 2008. The company will increase the number of drilling rigs from six to eight while expanding facilities for crude oil production.
Last year, Brigham Exploration increased its total land acquisition in the area to 174,000 acres.
Other players in the Bakken battle for heavy oil include Kodiak Oil & Gas, EOG Resources, Whiting Oil & Gas, Continental Resources, Petroleum Development Corporation and Petrobank.
The Bakken formation is found in the Williston Basin, underlying much of North Dakota, eastern Montana and extending up into southern Saskatchewan. The Mississippian aged Bakken is an extensive regional resource play with the oil contained mostly in siltstones and thin sandstone reservoirs with low porosity and permeability.
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