WBPC preview Bakken strong

2014-05-15T11:01:00Z WBPC preview Bakken strongBy Scooter Pursley for Bakken Breakout Bismarck Tribune
May 15, 2014 11:01 am  • 

People were ready. The phones were queued up, the people in Bismarck were ready and those getting ready to order tickets were online. Events like these have been known to sell out fast.

The question was how fast?

Four minutes after registration opened for companies wanting one of the roughly 300 booths available at Williston Basin Petroleum Conference, they were gone. That easily eclipsed the 17 minutes it took to sell out the previous conference.

"We were shocked two years ago by 17 minutes," said North Dakota Petroleum Council President Ron Ness. "We got calls from all over the world. We literally had 800 people logged into system at 9 o'clock and turned away hundreds."

The interest in the conference mirrors that of the Bakken and Three Forks plays.

The conference May 20-22 in Bismarck brings together some of the biggest players in the industry. The Bakken isn't your run-of-the-mill oil play. It's a game-changer, as North Dakota and the nation is finding out.

Issued created by tapping the enormous reserves have to be addressed, and many like waste management, water use, resource recovery and flaring are major topics of discussion.

"We're always tackling the issue of the day, but they're always changing," Ness said. "We address some from the past and move on."

Ness said the conference itself has seen major changes in its brief history.

"We used to be thrilled with one CEO, now our agenda is packed with super CEOs," Ness said.

That includes some of the biggest movers and shakers in the energy industry, for instances, Marathon Oil President and CEO Lee Tillman.

Tillman's keynote address on Wednesday will be "The Bakken: Creating a New Reality for America's Energy Future."

Marathon is active in North Dakota and expanding its presence.

"Unconventional (horizontal) drilling started for us in the Bakken," Tillman said. "Now we find ourselves as a company in three of what we believe are the highest quality resource plays in the U.S. It really did start in the Bakken."

Marathon has 370,000 acres and six rigs running in the Bakken. It also has 200,000 acres and 18 rigs in Eagle Ford in south Texas and 210,000 acres and four rigs in Oklahoma. The shale plays have revolutionized the industry.

Tillman called the shale discovery a "revolution within a revolution."

"The shale play really started in the major unconventional gas shale play," Tillman explained. "As we started seeing moderations in gas prices, the ability to start looking at liquids-rich shale plays really came en vogue. That's when the Bakken for us became center stage. It's relatively recent."

Events like the Williston Basin Petroleum Conference are so large due to the seemingly unlimited potential of the play.

Marathon is expanding its role in the Bakken.

"When you look at our investment for 2014, about 60 percent of my $5.9 billion capital budget is going into the three resource plays, specifically in the Bakken, we're investing just around a billion dollars," Tillman said. "We've accelerated activity in the Bakken, essentially running six rigs, which is a material acceleration in where we were last year. Our confidence in doing so is predicated on a continuing growth in the resource there. The good stuff could be better is how I would put it."

Tillman said Marathon has been in the Bakken since 2006. "The growth for us has really been nothing short of phenomenal. In the last two years we've grown our production 30 percent year on year. If you look out beyond into 2014, we're actually looking to grow our production another 20 percent. It's a tremendous growth story, not only for Marathon but also for the industry and certainly it is an economic bright spot for North Dakota and quite frankly the country."

Exactly how bright is it? Well, it seems to get brighter each day.

Tillman said Marathon estimates having probably 600 million recoverable barrels in the Bakken, and other operators are seeing similar success.

"There's no doubt the Bakken can hold its own. We're in a state that encourages investment and is a supporter of our industry," Tillman said. "It's a great place for us to operate. We feel like North Dakota has embraced the industry and we've earned that respect over time.

Tillman said he is also excited by production from the first bench of the Three Forks Formation.

"We have traditionally produced from the middle Bakken. That's a specific formation," pointed out. "However, we have many operators exploiting the Three Forks. About 25 percent of our 2P resource and 25 percent of our current production is being sourced from the Three Forks first bench. The really exciting part is we're looking for prospectivity from the deeper benches of the Three Forks, which is just going to add more potential resource."

Tillman will also touch on high-density drilling, which is spacing pumps closed together to limit the footprint on the environment and address some of the issues involving rail safety while shipping Bakken crude.

"The industry is understanding the incidents that have occurred and looking at extent we can engage and insure we're doing the right things in the elements of the transportation chain we can control," Tillman said. "We took the highest-level packing standard for our crude to make sure it was appropriately labeled and handled correctly.

"We want to be solution driven because we want to drive toward solutions that will allow us to continue to drive employment, economic prosperity and certainly this new-found energy security we have in the U.S. thanks to plays like the Bakken.

Solutions will bring the 3,000 to 5,000 people to the conference.

"The interest seems to double year over year. It's amazing," Ness said. "It's an indication that it has become a can't-miss event."

Ness said two years ago, conference-goers reserved every room within 100 miles. Even though Bismarck has added lots of rooms since then, lodging is likely to be what keeps the conference between 4,000 and 5,000 attendees.

Two years ago, the conference attracted attendees from 47 states, nine countries and seven provinces.

This year's attendees will also hear from national radio host Sean Hannity, Harold Hamm of Continental Resources, Tommy Nusz of Oasis Petroleum, John Harju of the Energy and Environmental Research Center, as well as numerous state and regional officials. "You've got an active North Dakota petroleum council there that is a great forum for operators," Tillman said.

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