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Dakota's Oil Fields Turn Farmers into Millionaire Drillers
Redorbit.Com/Tribune-Review/Pittsburgh Tribune-Review ^ | 6-16-08 | Anthony Effinger

Posted on 07/06/2008 7:41:37 AM PDT by STARWISE

John Bartelson, who smokes Marlboro Lights through fingers blackened with tractor grease, may look like an average wheat farmer. He isn't. He's one of North Dakota's new oil barons.

Every month, he gets a check for tens of thousands of dollars from a company in Houston called EOG Resources Inc., which drilled two oil wells on his land last year. He says the day his first royalty check arrived was one to remember.

"I smiled to beat hell, and I went to town and had a beer," Bartelson, 65, says.

His new wealth springs from the Bakken formation, a sprawling deposit of high-quality crude beneath the durum wheat fields of North Dakota, Montana and southern Saskatchewan and Manitoba. The Bakken may give the United States -- the world's biggest importer of oil -- a new domestic energy source.

Unlike the tar from Canada's oil sands, Bakken crude needs little refining. Swirl some of it in a Mason jar and it leaves a thin, honey-colored film along the sides. It's light -- almost like gasoline -- and sweet, meaning it's low in sulfur.

Best of all, the Bakken could be huge. The Geological Survey's Leigh Price, a Denver geochemist who died of a heart attack in 2000, estimated that the Bakken might hold 413 billion barrels. If so, it would dwarf Saudi Arabia's Ghawar, the world's biggest field, which has produced about 55 billion barrels.

The challenge is getting the oil out. Bakken crude is locked 2 miles (3.2 kilometers) underground in a layer of dolomite, a dense mineral that doesn't surrender oil the way more porous limestone does. The dolomite band is narrow, too, averaging just 22 feet (7 meters) in North Dakota.

The USGS said in April that the Bakken holds as much as 4.3 billion barrels that can be recovered using today's engineering techniques. That's a fraction of the oil that Price said should be there, but it's still the largest accumulation of crude in the 48 contiguous U.S. states. North Dakota, where Bakken exploration is most intense now, won't become Saudi Arabia unless technology improves.

For decades, the Bakken was the fool's gold of the oil industry. The name describes a geological formation that looks like an Oreo cookie: two layers of black shale that bleed oil into the middle layer of dolomite. It's named after Henry O. Bakken, the North Dakota farmer who owned the land where the first drilling rig revealed the shale layers in the 1950s.

All of the layers are thin -- about 150 feet altogether -- and none of them give up oil easily. In older, vertical wells, oil would often flow for a month and then fizzle.

Now, companies like EOG are drilling horizontally. They go straight down 10,000 feet and then put a slight angle in the mud motor, a 30-foot piece of tubing that drives the bit, so they hit the Bakken sideways, making a horizontal tunnel as much as 4,500 feet long through the dolomite. Then they pump pressurized water and sand into the hole to fracture the dolomite, making cracks for oil to seep through.

It eventually winds up in a pipeline that runs east to Clearbrook, Minn., and then south to Chicago.

Several billionaires are at work in the Bakken. Harold Hamm's Enid, Okla.-based Continental Resources Inc. has leases on 487,000 acres in Montana and North Dakota. Hamm, who started out driving a truck, owns 73 percent of Continental, worth $7.9 billion. Philip Anschutz, 68, founder of Qwest Communications International Inc. and Regal Entertainment Group, is there, too.

The big winner so far has been EOG, formerly a subsidiary of bankrupt energy trader Enron Corp. It drilled a horizontal well in western North Dakota just north of Parshall -- population 1,028 -- in April 2006. The well came online a month later and kicked out 1,883 barrels in the first seven days. Unlike the older vertical wells, it's still going.

Northern Oil & Gas Inc., a five-person company near Minneapolis, makes money without drilling or operating wells. It leases in promising areas like the Bakken and gets paid when someone else uses the land to drill.

The other people doing well in the Bakken are the mineral owners under the oil wells -- folks like John Bartelson. Oil drillers have paid them millions for right of access to the oil deposits.

Bartelson's checks are about to get bigger. One more EOG well just came online, he says, and another is about to be fractured with water. Still another has been permitted for drilling. For now, he's farming. The oil market is fickle, he says. Previous crashes drove the rigs out of North Dakota for years, leaving only the wheat.

"It'll crash again," Bartelson says, sipping on a late- afternoon cup of coffee beside his tractor.

Maybe so. But with crude trading above $125 a barrel, it'll be a long time before the rigs leave again, and John Bartelson is likely to be a wealthy man before they do.


TOPICS: Business/Economy; Foreign Affairs; Politics/Elections; US: North Dakota
KEYWORDS: bakken; bakkenformation; drilling; energy; millionaires; northdakota; oil
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To: Chewbacca
He ain’t getting my vote.

I guess I'll thank you for your support of Hussien Obama in November! McCain is not who I would want but he is better then Hussien.

Some of you are so STUPID. A Third party won't win - and you'll help MARXISM spread with your vote. Dumba$$es.

51 posted on 07/06/2008 11:26:36 AM PDT by RightWingTeen (Caution: homeschooled teen with a Brain that works - LIBERALS you can't control me!!)
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To: PSYCHO-FREEP

I have been following developments, and investing in the Bakken even before EOG hit it big. You have your opinion, and I have mine. I think you are wrong. Only time will tell, but I have made a fortune, how about you?


52 posted on 07/06/2008 11:27:19 AM PDT by Melchior
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To: RightWingTeen

Its not an easy degree to get. I couldn’t pronounce the names of some of his text books. I’m very proud of him and he is a good musician. sigh.


53 posted on 07/06/2008 11:39:06 AM PDT by Mercat (For if their purpose or activity is of human origin, it will fail.)
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To: PSYCHO-FREEP
yield what we require daily

What is your point? I seriously doubt that anyone has ever asserted that any single source would yield what we require daily.

It makes good since for America to utilize its 500 year supply of oil, gas, and coal prudently.

54 posted on 07/06/2008 11:47:53 AM PDT by MosesKnows (Love many, Trust few, and always paddle your own canoe)
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To: WhyisaTexasgirlinPA
My dad was a gas plant contractor so we moved a lot from job to job constructing compressor stations and plants.

I remember as a child he had a gang truck.

One of the hired hands from the university (future engineers) had attached a bumper sticker about being a piano player.

Dad at the end of Summer would give all the young college kids a coffee mug that said “I'm so smart I make myself sick”.

Nothing like running a long handled Mexican backhoe squaring up ditches to help make a young kid decide to stay in college and get an education.

55 posted on 07/06/2008 11:51:25 AM PDT by OKIEDOC (OBAMA aka Post Turtle ABORTION - The ultimate form of Liberal Child Abuse.)
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To: MosesKnows
If you think the Baaken field is large, look at WWW. Gull Island. Geologists say it contains enough recoverable oil to run the U.S. for 200 years..
56 posted on 07/06/2008 11:53:33 AM PDT by BooBoo1000 (Some times I wake up grumpy, other times I let her sleep/)
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To: panthermom

Great post many of us totally agree.


57 posted on 07/06/2008 11:55:16 AM PDT by rodguy911 (Support The New media, Ticket the Drive-bys, --America-The land of the Free because of the Brave-)
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To: STARWISE

One error in the story. The farmer is a royalty holder, not a driller. If he owns the mineral rights, he gets 1/8th (usually) of the money from the oil.


58 posted on 07/06/2008 11:58:18 AM PDT by ozzymandus
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To: rodguy911

>>But aren’t we far better off if we drill between
>>50 and 150 miles offshore? Doesn’t it all
>>happen much quicker?

What, and displace the Communist Chinese? American natural resources can only be used if such usage advances the globalist cause.

Which reminds me...

Hey BP, GTHOOMC! - ‘cause WE didn’t vote for your monarchies.


59 posted on 07/06/2008 11:59:57 AM PDT by LomanBill (A bird flies because the right wing opposes the left.)
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To: OKIEDOC

Good story. Years ago I remember high school boys doing roofing jobs in the summer. They were paid more than anyone else, got a great tan, built muscles, and swore they would never do that job again, ever! ;^)


60 posted on 07/06/2008 12:09:31 PM PDT by WhyisaTexasgirlinPA (It's the Vast Wright Wing Conspiracy - labeling all whites as racist.)
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To: STARWISE
The Bakken may give the United States -- the world's biggest importer of oil -- a new domestic energy source.

Not if Harry and Nancy have anything to do with it.

61 posted on 07/06/2008 12:15:33 PM PDT by Tolerance Sucks Rocks (Drill Here! Drill Now! Pay Less! Sign the petition at http://www.americansolutions.com/)
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To: LomanBill
Wow I just read an eyeful about Gull Island.
62 posted on 07/06/2008 12:15:52 PM PDT by rodguy911 (Support The New media, Ticket the Drive-bys, --America-The land of the Free because of the Brave-)
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To: RoadTest

Yes, all this IS bad news for the Montana prairie seal.


63 posted on 07/06/2008 12:19:30 PM PDT by Tolerance Sucks Rocks (Drill Here! Drill Now! Pay Less! Sign the petition at http://www.americansolutions.com/)
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To: PSYCHO-FREEP
There is no way the Dakota fields will ever yield what we require daily. The estimate of total oil is very much exaggerated in the article. The recovery rate is less than 3% of about 200 billion in potential biomass.

Also, the area mentioned is in the Newtown area, which is the thickest part of the entire field (Williston Basin) and is not a good example of the overall field’s potential.

Harry? Harry, is that you?


64 posted on 07/06/2008 12:25:54 PM PDT by COBOL2Java ("It's not my fault if McCain loses - it's his own damn fault!" - Mark Levin)
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To: PSYCHO-FREEP

That much money not going to OPEC sounds good to me. Every dollar that stays here helps us.


65 posted on 07/06/2008 12:30:27 PM PDT by ozzymandus
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To: PSYCHO-FREEP

Well, we tap the Bakken and whatever else is legal and force Congress to open up offshore and ANWR. 150,000 bpd here, a million there, and so on, and pretty soon, you’re talkin’ real oil.


66 posted on 07/06/2008 12:32:18 PM PDT by Tolerance Sucks Rocks (Drill Here! Drill Now! Pay Less! Sign the petition at http://www.americansolutions.com/)
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To: OKIEDOC

I haven’t seen one of those bumper stickers in a while. I never understood who considered oilfield hands “trash”. They always made pretty good money compared to most other working men, and they certainly earned their pay.


67 posted on 07/06/2008 12:32:54 PM PDT by ozzymandus
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To: WhyisaTexasgirlinPA

There’s also “Oilfield Trash And Proud Of It”.


68 posted on 07/06/2008 12:38:41 PM PDT by ozzymandus
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To: ozzymandus
Back in the late 50’s and 60’s some people looked down their noses at those folks who moved from one oil field to another.

Actually being dubbed “Oil Field Trash” was sort of a badge of honor.

Sort of like when I was a Freshman and a self respecting cowboy in college and had “GDI” (Gawd Dang Independent)plastered on my textbooks letting the world know that this cat wasn't a sand dipping, ice cream britches wearing Frat Rat.

69 posted on 07/06/2008 12:47:07 PM PDT by OKIEDOC (OBAMA aka Post Turtle ABORTION - The ultimate form of Liberal Child Abuse.)
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To: Tolerance Sucks Rocks
LOL, "the Montana prairie seal"....HaHaHaHa.....still laughing.....
70 posted on 07/06/2008 1:03:47 PM PDT by Chgogal (Voting "Present" 130 times might be a sign of a smart politician. It is not a sign of a good leader)
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To: Tolerance Sucks Rocks

I understand the Montana penguins won’t be affected.


71 posted on 07/06/2008 1:27:35 PM PDT by RoadTest ( Destroy this temple, and in three days I will raise it up. But he spake of the temple of his body.)
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To: OKIEDOC
I didn’t want her to know I was oilfield trash.

Better than being a Democrat.

72 posted on 07/06/2008 1:43:42 PM PDT by Conservativegreatgrandma
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To: RightWingTeen

I just want to be able to drive around with a bumper sticker that says:

“Don’t blame me for the crap this country is in I voted for Ron Paul ‘08!”


73 posted on 07/06/2008 1:56:27 PM PDT by Chewbacca (Ron Paul and if not him then Chuck Baldwin '08!)
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To: Conservativegreatgrandma
Better than being a Democrat.

That would be the current crop of pantie waisted cowardly run and hide Democrats led by the stupidest leaders in the history of America in Nancy Peloser and Hairless Read.

74 posted on 07/06/2008 4:39:29 PM PDT by OKIEDOC (OBAMA aka Post Turtle ABORTION - The ultimate form of Liberal Child Abuse.)
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To: OKIEDOC

That would be them.


75 posted on 07/06/2008 4:52:51 PM PDT by Conservativegreatgrandma
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To: STARWISE

But this bunch is dead set against domestic drilling, and they sure don't want a farmer making money off of oil. They will tax North Dakotans as much as they can.

"No windfalls for you!"

76 posted on 07/06/2008 5:01:35 PM PDT by twntaipan (NOBAMA! Say No to B.O.!)
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To: twntaipan

That’s the total truth.


77 posted on 07/06/2008 5:35:40 PM PDT by STARWISE (They (Dims) think of this WOT as Bush's war, not America's war-RichardMiniter, respected OBL author)
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To: Mike Darancette

Incredibly nice. Clean, very low crime rate, like-minded family-oriented people, for the most part...but expensive with a capital “E.” Three bedrooms on a postage stamp will set you back $350,000-$400,000 and rent on a two bedroom apt. is about $1100-$1500/mo...It’s a “boom-town.”
Lots to do, with the mountains and a lot of lakes close by. Some of the best whitetail and muley hunting anywhere in North America...I miss it a great deal - I live in the socialist paradise of Ontario now, unfortunately.


78 posted on 07/08/2008 4:43:16 AM PDT by milky
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