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ND to see new oil wells punched for next 20 years


The Forum

North Dakota has 2.1 billion barrels of recoverable oil in the Bakken formation, a number that will only go up as industry technology advances, the state's top oil regulator said Monday.

At the rate wells are being drilled, it will take 19 years to punch all the holes necessary to get to it, said Lynn Helms, North Dakota's director of mineral resources.

"So we've got a couple good decades ahead of us," he told the audience at the Williston Basin Petroleum Conference and Expo, where the North Dakota study was released.

About 1,350 people registered for the conference, paying $185 each.

The North Dakota Bakken analysis matches the recent U.S. Geological Survey's report on the Bakken, Helms said, even though North Dakota's experts analyzed the Bakken potential using a different method. Neither state nor USGS officials knew what the other's report was going to conclude.

The USGS said earlier this month that the U.S. part of the Bakken, which lies under western North Dakota and eastern Montana, contains 3 billion to 4.3 billion barrels of economically recoverable crude. By contrast, North Dakota has produced 1.6 billion barrels since oil was discovered in the state in 1951.

The Bakken also underlies Saskatchewan and a corner of Manitoba.

That North Dakota reached similar results as the USGS using difference analysis methods lends credence to each report and to other previous studies that had similar findings.

Ron Ness, president of the North Dakota Petroleum Council, said Helms' report was not surprising, but "a little more of a validation" of what other reports had said.

The North Dakota study is broken down by county, showing the Bakken lies under 13 western counties and holds 149 billion barrels of "original oil in place," with McKenzie County having the most, 32.4 billion barrels, followed by Mountrail County with 27.2 billion. The smallest amount is under Slope County, 10.6 billion. The state report cautions that "original oil in place" is not the same as proven reserves.

Only 1.4 percent of that oil is ultimately recoverable using current technology, which is the 2.1 billion barrels he reported.

Helms and Ness said the percentage would rise as the oil industry develops new and improved ways to fracture the Bakken's shale rock that holds the oil.

It's all ultimately up to technology," Ness said. "It's like a big laboratory out there," with each new well yielding more information about the nature of the oil and the way it can be recovered.

The Bakken will not give up its oil at the same pace in all counties.

Divide County has the fifth most oil in place out of the 13 counties (16.8 billion barrels) but its recovery rate with current technology is 0.7 percent, the worst in North Dakota's Bakken.

"We're going to have to develop some new technology to make Divide County work," he said. The county with the best recovery rate is Billings County, which has 3.1 billion barrels in place but a 3.69 percent recovery rate, followed by Stark, with 3.68 percent. Stark has 2.35 billion barrels of oil in place.

The USGS also estimated 1.85 trillion cubic feet of "associated dissolved natural gas" that can be produced with the Bakken oil, and another 148 million barrels of natural gas liquids.

In comparison, North Dakota produced 62.7 billion cubic feet of natural gas in 2006 and 70.8 billion cubic feet in 2007.