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N.D. study estimates 167 billion barrels of oil in Bakken

N.D. study estimates 167 billion barrels of oil in Bakken

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The Bakken shale formation in North Dakota holds up to 167 billion barrels of oil but only about 1 percent of it can be recovered using current technology, a new state study says.

The study released Monday said current technology could lead to the recovery of about 2.1 billion barrels in North Dakota's the "middle Bakken" formation, where oil-producing rock is sandwiched between layers of shale about 10,000 feet under the ground.

"The future potential is enormous - it means we will be able to exploit this for the rest of the century," said Lynn Helms, director of the state Department of Mineral Resources, which conducted the study.

Helms released the study Monday at an annual state oil conference in Minot, where the Bakken was a big topic on the three-day agenda. The conference, limited to 1,300 participants, sold out Friday.

Ron Ness, president of the North Dakota Petroleum Council, cautioned against over-hyping the Bakken play.

"This study gives a number that by no means guarantees those are the amount of barrels we can count on," Ness said. "The Bakken rock is full of oil and companies drilling out there know that, and they know it is extremely difficult and extremely expensive."

Ness said it costs more than $5 million to drill a Bakken well, and dozens are currently producing.

"What industry is mostly concerned with is to find - economically - what is going to work in the Bakken," Ness said. "What we have right now is one big scientific experiment going on out there."

The U.S. had some 20.9 billion barrels of proven oil reserves in 2006, the most recent year available, said John Wood, director of reserves and production for the U.S. Department of Energy's information administration.

North Dakota contributed 422 million barrels of proven oil reserves to that number two years ago, before the Bakken estimates were released, he said.

The Bakken estimates are "of major importance, not just to North Dakota, but the whole country," Wood said. He believes the state and federal estimates of recoverable oil in the Bakken are conservative.

"I think the current number will grow very substantially over time as recovery factors grow and the geology is better understood, he said.

The Bakken shale formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota, where the oil is trapped in a thin layer of dense rock nearly two miles beneath the surface.

To capture oil from the middle Bakken in North Dakota, most companies "fracture stimulate" the horizontal wells by forcing pressurized fluid and sand to break pores in the rock and prop them open to recover oil.

The middle Bakken, which ranges from a few feet thick to 80 feet, is between layers of loose shale. Its rock consists of sandstone and siltstone, with microscopic pores that contain the oil. The formation is 365 million years old, said Ed Murphy, the state geologist and director of the state Geological Survey.

"That rock is as hard as the cement in your driveway," Ness said.

Wells aiming for the middle Bakken are drilled vertically to about 10,000 feet and then "kick out" for as many feet horizontally. Ness likens it to drilling through the top of an Oreo cookie and turning sideways to get to all the creamy filling.

Part of the conference, which runs through Tuesday, will focus on sharing information on drilling technology for the Bakken, Ness said.

The state study mirrors the findings of a federal study released on April 10.

The U.S. Geological Survey estimated that up to 4.3 billion barrels of oil could be recovered from the Bakken shale formation in North Dakota and Montana, using current technology.

That report was done independently of the state study, Murphy said.

"Their numbers also include Montana, ours only includes North Dakota," he said.

The federal report found up to 2.6 billion barrels could be recovered in North Dakota, compared with the state's estimate of 2.1 billion barrels, Murphy said.

"We were quite surprised the numbers were so close," he said.

Helms said the federal study focused on the performance of wells currently working in the Bakken, while the state "went back and looked at the rock."

He said the state study partially validates a study done by Leigh Price, a USGS geologist who died in 2000 before his study was published. Price estimated the Bakken held between 200 billion and 500 billion barrels of oil.

The most recent federal study does not estimate how much oil may be in the formation - only what the agency believes can be recovered using current technology.

The state study gives an estimate of what the Bakken may hold in North Dakota, in what is known as an "in-place oil resource."

The Geological Survey said about 105 million barrels of oil have been produced from the Bakken through last year. The Elm Coulee oil field in eastern Montana, near the North Dakota border, has produced about 65 million barrels of the total, the agency said.

When the Elm Coulee field was discovered in 2000 it was "by far the biggest" onshore discovery in the U.S. in 50 years, and production and reserves have been growing rapidly since, Wood said.

"Many of the related plays in North Dakota are also looking great," he said.

About 7 billion barrels of oil are used annually in the U.S., Wood said.

Ness said North Dakota accounts for about 2 percent of domestic oil production. Even with increases from the Bakken, "we're still talking about a small impact in a big picture, but still very significant to our area," he said.


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