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1.85 billion barrels later, North Dakota's oil patch turns 60

1.85 billion barrels later, North Dakota's oil patch turns 60

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BISMARCK, N.D. (AP) - North Dakota's oil patch marked its 60th anniversary on Monday amid record production, drilling activity and government estimates that show the industry is likely still in its infancy.

Since April 4, 1951, when Amerada Corp.'s well struck oil on Clarence Iverson's wheat farm near Tioga in the northwest part of the state, some 1.85 billion barrels have been produced in North Dakota, state Industrial Commission records show. Officials estimate that at least twice that amount remains untapped in the Bakken shale and the Three Forks formation below it.

"As technology increases, we know oil is still down there - a lot of oil," said Ed Murphy, the state geologist and director of the Geological Survey. "Who knows what the next 60 years will bring?"

The Bakken shale has been the biggest producer of crude in recent years, due to advances in horizontal drilling and hydraulic fracturing techniques. But the now-booming Bakken has accounted for just 11 percent of the crude pumped from the state's oil patch to date. Industrial Commission records show 49 percent of the oil produced in North Dakota has come from the Madison formation, a layer of oil producing rock directly above the Bakken that was tapped for decades using traditional vertical wells.

Bakken production had been just 13 million barrels until 2004 but jumped 191 million barrels since then, records show.

Three years ago, the U.S. Geological Survey estimated that up to 4.3 billion barrels of oil could be recovered from the Bakken in North Dakota and Montana, using current technology. The agency called it the largest continuous oil accumulation it had ever assessed. The federal report found up to 2.6 billion barrels of Bakken crude could be recovered in North Dakota, compared with the state's estimate of 2.1 billion barrels.

The state also has estimated another 1.9 million barrels of crude can be recovered in the underlying Three Forks formation using current technology.

"Those reserves are, of course, off the charts as far as potential," said Ron Ness, president of the North Dakota Petroleum Council, which represents about 250 companies. "For 55 years we did OK producing from other zones, then the Bakken overshadowed all the other successes."

North Dakota has about 5,300 producing oil wells; about 2,000 of those have come online in the past three years, aimed at the Bakken and Three Forks. Nearly 95 percent of rigs drilling in North Dakota are aimed at those formations, and 99 percent of them hit oil, while nine of 10 are profitable, state and industry officials say.

Record rig activity pushed by strong crude prices and refinements in drilling technology could result in North Dakota - which is currently the nation's No. 4 oil producer - seeing a twofold increase in production in four to seven years, state and industry officials say.

Industrial commission records show 171 rigs were drilling on the state's anniversary Monday, three short of a record set in mid-March. State and industry officials expect as many as 200 rigs to be drilling in North Dakota later this year.

North Dakota pumped a record 113 million barrels of oil in 2010. State officials estimate the state will produce 700,000 barrels daily in four to seven years.

The well that struck oil on Iverson's farm 60 years ago, which came after decades of dry holes, triggered an oil rush throughout the Williston Basin, a 134,000 square-mile-area that includes North Dakota, South Dakota, Montana and the Canadian provinces of Saskatchewan and Manitoba. Western North Dakota accounts for more than a third of the Williston Basin acreage.

"It was a huge deal for the entire Williston Basin," Ness said. The basin has produced more than 5 billion barrels of oil to date.

The Clarence Iverson No. 1 produced 585,000 barrels of oil over 28 years. Ness said no special ceremonies were slated to commemorate the well that started it all.

"The celebration is the activity," Ness said. "That speaks for itself."



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