Skip to comments.PN Bakken: Bakken reserves to jump
Posted on 04/28/2012 4:49:16 AM PDT by Recon Dad
USGS next recoverable oil estimate expected to double to 8 billion barrels
Petroleum News Bakken Editor
The U.S. Geological Survey, in a highly anticipated report to be released next year, is expected to at least double the amount of oil reserves that can be recovered from the U.S. portion of the massive Bakken play in North Dakota and Montana. This is the consensus of company executives and industry consultants interviewed by Petroleum News on the sidelines of the 2nd Annual Bakken Investor Conference held April 2-4 in Minot, North Dakota.
April 2008 was the last time the USGS reported on the immense play, estimating it held from 3-to 4.3 billion barrels of undiscovered, technically recoverable oil in an area generally known as the Bakken formation. The study estimated mean undiscovered volumes of 3.65 billion barrels of oil, plus 1.85 trillion cubic feet of associated-dissolved natural gas, and 148 million barrels of natural gas liquids. That estimate represented a 25-fold increase in the amount of oil that could be recovered compared to the agencys 1995 estimate of 151 million barrels of oil.
The Upper Devonian-Lower Mississippian Bakken formation is a thin but widespread unit wit in the central and deeper portions of the Williston basin that in addition to Montana and North Dakota, include the Canadian provinces of Saskatchewan and Manitoba. However, USGS reserve estimates on the Bakken are limited to U.S. territory.
The Bakken reserve estimate of 2008 was larger than all other USGS oil assessments of the lower 48 states and was the largest continuous oil accumulation ever assessed by the USGS. A continuous oil accumulation means that the resource is dispersed throughout a geologic formation rather than existing as discrete, localized occurrences, according to the USGS. At the time, the next largest continuous oil accumulation in the United States was the Austin Chalk of Texas and Louisiana, with an estimated 1 billion barrels of technically recoverable oil.
The next Bakken reserve update was to begin in October 2011 and take two years to complete, depending on project financing, according to the U.S. Interior Department.
Drilling, fracking more advanced
But a lot of Bakken oil has gone to market since the 2008 USGS reserve estimate. For one, more well data is available for analysis. Back then information was gleaned from just a few hundred producing wells, compared to thousands of wells that have since been drilled and put on line. Moreover, the technologies of horizontal drilling and shale fracturing, which made the Bakken oil boom possible, are far more advanced. Therefore, the USGS 2013 reserve estimate is expected to be around 8 billion barrels or more of technically recoverable oil, depending on whether additional oil zones, such as the Three Forks, located below the Bakken formation and sourced by the Bakken, is included in the next reserve assessment, according to industry leaders.
Thats what Im hearing based on new data thats come in on the wells that have been drilled, Laura Erickson, an industry consultant and head of Williston, North Dakota-based Plains Energy Technical Resources, LLC, said of the 8 billion barrels reserve projection. There have been a lot of development areas; new fields that have been developed; and plenty of wells that have been drilled.
I think there are a lot of people who think that (8 billion barrels) is reasonable, Terry D. Hildestad, president and chief executive officer of MDU Resources Group, told PN, noting that production from his companys last eight wells was up more than 40 percent from wells MDU drilled a year earlier.
I mean that is phenomenal, Hildestad added. Thats because were getting better at understanding the geology, the fracking and all of that stuff you do in a well. And thats not unusual. That probably happened in Alaska and to a lot of other oil plays. People get smarter and get better.
Recovery rate is 3-6%
Moreover, the Bakken is in a relatively early phase of development, with a paltry 3-6% recovery rate of all the oil in place. However, once in-field drilling begins in earnest, and enhanced recovery techniques, such as CO2 injection and water flooding, are employed, the Bakkens ultimate oil reserves could reach well beyond the 2013 estimate of 8 billion barrels. Marty Beskow, executive vice president of Voyager Oil & Gas, pointed out that many operators have been drilling single wells on a typical 1,280-acre spacing unit in order to secure mineral rights to their leases while booking some reserves. However, he said, each unit could ultimately support five wells in the Bakken alone and another five in the Three Forks, for a total of 10 wells per unit.
I dont know whether the study will include Three Forks estimates, Beskow said of the 2013 USGS study. But both of them should be increasing because of those technology advances and just being farther along the learning curve. For each well that an operator drills thats another piece of information they didnt have before. I believe the estimates for the Bakken and Three Forks will be higher on whatever number they come up with.
Geological and engineering consultant Kathleen Neset, president of Neset Consulting, came to North Dakota 33 years ago as a geologist with Core Laboratories. Shes known as the Godfather of the Bakken.
More rock, more reservoir
Ive seen people coming up with even larger numbers than 8 billion barrels, depending on how much of the Three Forks formation is included in the USGS study, she said. You add more rock to the reservoir, you add more reserves. But keep in mind that the entire system is sourced by that Bakken shale. Even the Three Forks is sourced by that same rock. The USGS will include both the Bakken and Three Forks formations in its 2013 assessment.
The more we know about the geology, the more robust and accurate the assessment can be, Stephanie Gaswirth, USGS task chief of the Williston basin assessment, was quoted as saying in the April 7 edition of the Dickinson Press.
The USGS did not study the Three Forks formation in its 2008 assessment, Gaswirth added, telling the newspaper, at that point, there was little activity in the Three Forks, and there has been quite a boom in the Bakken and Three Forks. Theres a lot of new information both geologic and production wise.
Wyatt Oil is apparently in North Dakota, not Colorado.
Hopefully life won’t imitate art.
Compare to the East Texas Oil Field, with total production to date of 5.2 billion barrels.
Compare to Prudhoe Bay, with production as of 2005 of 11 billion barrels.
In 1980, the U.S. had oil reserves of roughly 30 billion barrels. Yet from 1980 through 2010, we produced over 77 billion barrels of oil. In other words, over the last 30 years, we produced over 150 percent of our proved reserves.
The track record of the Federal Government and the industry in general to quantify the future with regards to oil and gas would have me betting on the “over” rather than the “under”.
Still gotta get past the enviro-whakos. All they have to do is OFFER to divide a certain percentage of the oil drilled to black Americans born before the Civil Rights Act. I’d call it “40 Acres and a Mule.” Then sit back and watch.
That’s interesting, as 8 billion barrels is really only 1+ year worth of oil at 20 million barrels per day consumption. Hofmeister says we have more than Saudi Arabia’s 260 billion. There must be a lot of Bakkens scattered around.
Lots of complaining around the coffee shops here in North Louisiana about the low, low prices of natural gas and the resulting decrease in royalty payments to property owners.
And also lots of scrutiny and interest in the Brown Dense formation.
Great news, now we need a President who will allow Energy companies to get the reserves.
Most of the oil drilling here is being done on private property.
Maybe if we just push the “reset” button this November...
Back when the boom hit East Texas oil sold for 10 cents per bbl. I believe as the infrastructure expands to move product into areas where there's no NG now and we start exporting LNG the prices will rise and the prices will level out.
I used to travel throughout Louisana, Arkansas and Mississippi back in the mid 70’s. You can't beat the people in the South. Sounds stupid but one of my favorite towns was Bastrop.
I’d rather not see Wyatt’s Torch myself.
Bastrop was hit hard several years ago when the International Paper mill closed. It had been in operation since about 1925.
Location of one of the original sporting goods “superstores” before Bass Pro Shops came along.
There is an old, made new again play due to new technology, called the Tuscaloosa Trend, just kicking off. It is a VERY thick formation. There are a lot of majors leasing up land in the central part of the state of Louisiana. It is estimated to hold between 3 - 7 billion barrels of recoverable oil. Some geologists are calling one section the "Louisiana Eagle Ford", because of its age is like that of the Texas Eagle Ford formation.
In some areas, Austin Chalk overlays the Eagle Ford and TMS layers. One Austin Chalk well in East Texas came in at 2'000+ barrels a day!
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