Bakken Shale Formation - North Dakota

The fact that the Bakken Shale Formation Oil Field contained a lot of oil has been known since the 1950's. But the price of oil  was too low and the oil drilling technology not advanced enough to economically recover the oil. An oil price of at least $50 per barrel was needed to justify the cost of developing technology to recover the Bakken formationoil at a profit.. 

 The present price of oil has now risen to such a level that development costs can be covered and a profit made producing Bakken oil.

  The drilling technology to recover Bakken Shale Formation - North Dakota oil involves horizontal drilling, fracking , and use of proppants.   As experience is gained in working the difficult Bakken shale formation, more and more of the oil can be efficiently recovered.

Many oil companies are either already operating in Bakken or on their way to Bakken. 

Bakken Shale Formation - How Much Oil is There?

L.C. Price, a geologist (or geochemist) working for the U. S. Geological Survey (USGS) is the person generally credited with determining the huge size of North Dakota's Bakken Formation oil reserves.

In the 1990's, Mr. Price (working for USGS), performed an intensive investigation of the Bakken Formation oil field.  Much of his work was done by analyzing abandoned oil wells in the area.  He made the surprisingly large estimate that the Bakken contained as much as 500 billion barrels of oil.  His report was given to the USGS in 1999.  Price died in 2002. 

The Price report has never been released to the public.  Its still a secret!

However, other geologists have confirmed Price's contention that there is a lot of oil in the Bakken Formation.  The most noted of these geologic folks was probably Richard Findley who, after reviewing geological and seismic data from the field, presented his explanation of how previous drillers has missed the vast oil reservoir.  They had drilled through it!  Findley said the oil lay between two large shale layers which are the source rocks.  A non-shale layer of dolomite is sandwiched between the two shale layers and this center layer is apparently where the bulk of the oil is contained

Findley had always had trouble finding deep-pocketed folks to invest in his geological ideas.  But now Findley was able to get Lycos Energy of Houston to work with him on the Bakken Formation.  Apparently, Lycos brought in Halliburton to try horizontal drilling and fracturing to get to the oil.

The work was a success  in that Findley and his partners discovered the Elm Coulee Field in eastern Montana (part of the Bakken Formation) in the late 90's.  Since placed in production, the Elm Coulee Field has produced about 65 million barrels of  high-quality oil.  The Elm Coulee production figure constitutes about one-half the amount of oil that has been recovered from the Bakken Formation so far.  Obviously, the major part of the Bakken Shale Formation oil reserves has been barely touched. 

Even after discovery and production of the Elm Coulee Field, development of the Bakken Formation moved slowly.  But it did move.  And oil prices continued to rise.  So now, a few years later, oil activity in the Bakken Formation has turned into a oil rush as additional oil companies have begun to take aim at the Bakken Formation.

And what about the USGS?  In April, 2008, they released an estimate for the Bakken Formation of 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil.   4.3 billion barrels is a long ways from Price's original 500 billion barrel estimate but it is still a lot of oil.

So, we still don't yet have a good handle on precisely how much oil is in the Bakken Formation.  But you can be assured that, if the price of oil goes up,  the estimate of the amount of recoverable oil will grow proportionally.

The overall concept of recovering oil from the Bakken Shale Formation is simple.  You simply drill down vertically for about two miles until you hit the shale formation where the oil is located.  You then drill horizontally along the shale formation  for up to about two miles using fracturing techniques to "open up" the shale and inject proppants to keep it open.  Sounds easy but both the existing horizontal drilling technology and the existing fracking techniques had to be advanced considerably before the technology could be effective in North Dakota. 

The newly-developed Bakken shale formation technology is having considerable application elsewhere.  There are many difficult shale formations in the US where the advances made  in horizontal drilling and fracturing are now being used to develop these other difficult shale formations.  Obviously the technical work that has gone into producing the Bakken Formation is impressive and valuable. 

  Bakken Shale Oil Companies in North Dakota

Please note that the oil companies mentioned in this section, by no means, constitute a complete list of Bakken oil companies working in the oil play.  Things are moving too fast to know for sure all the oil companies involved. 

Based on what I read ,  EOG appears to have an edge in technology on most of the large companies active there.  EOG is drilling numerous wells there and appear to have a good handle on the drilling technology necessary to produce oil from the difficult Bakken shale formation.

ExxonMobile(XOM) and Marathon Oil Corporation (MRO) are large oil company  involved in the Bakken Shale Formation.

As previously noted, a multitude of smaller oil companies are rushing into the Bakken area.   These are probably the oil companies you can make the most money with.....if you know which company stocks to buy!  Do your own research.  A partial list of these small oil companies is included: 

Petrobank (PBEGF.PK)

Primary Petroleum

Whiting  Petroleum Corp (WLL)

Brigham Exploration Company (BEXP)

Continental Resources (CLR)

Enerplus (ERF)

Crescent Point Energy Trust (CPGCF.PK)

Pennant Petroleum (PENFF.PK)

Continental Resources and Enerplus are not really that small with the companies having market caps of, respectively, $13 billion and $5 billion.

For a more complete discussion of oil companies involved in the Bakken Shale Formation strike, go to Bakken Oil Companies.

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Three Forks/Sanish Formation.

A recent development at Bakken is the discovery that an apparent prolific oil-bearing formation lies just under the Middle Bakken Zone.  I say "apparent"  because there is some question as to whether the discovery is really a separate oil-bearing formation or is drainage from the Middle Bakken Zone.  Some of the Bakken companies are now aiming for this "formation"  and the resulting wells are strong producers.  The answer to the question as to whether this is a separate formation should be soon answered. 

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Websites For Bakken Shale Formation of North Dakota

I am not registered as a Investor Adviser nor am I a certified financial adviser.

Sometimes I give an opinion on the quality of an investment.  This information is based solely on my own  investment goals and investment needs and might not reflect your goals and needs and might not be an appropriate investment for your portfolio. I have not evaluated in detail the accounting, financial, or business practices of the companies profiled herein.