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Bakken formation

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Bakken formation
Stratigraphic range: Late Devonian to Early Mississippian
TypeGeological formation
Unit ofThree Forks Group
UnderliesMadison Limestone
OverliesWabamun Formation, Big Valley Formation, Torquay Formation
Area200,000 square miles (520,000 km2)
Thicknessup to 40 metres (130 ft)[1]
Lithology
PrimaryShale, Dolomite
OtherSandstone, Siltstone
Location
RegionWilliston Basin of
central North America
Country United States,  Canada
Type section
Named forHenry Bakken
Named byJ.W. Nordquist, 1953

Map of Bakken Formation reservoirs in the US portion of the Williston Basin (Saskatchewan is north border). Most oil comes from Elm Coulee Oil Field

The Bakken formation /ˈbɑːkən/ is a rock unit from the Late Devonian to Early Mississippian age occupying about 200,000 square miles (520,000 km2) of the subsurface of the Williston Basin, underlying parts of Montana, North Dakota, and Saskatchewan. The formation was initially described by geologist J.W. Nordquist in 1953.[2] The formation is entirely in the subsurface, and has no surface outcrop. It is named after Henry Bakken, a farmer in Tioga, North Dakota who owned the land where the formation was initially discovered.[3]

Besides being a widespread prolific source rock for oil when thermally mature, there are also significant producible reserves of oil within the Bakken formation itself.[4] Oil was first discovered within the Bakken in 1951, but efforts to produce it have reached difficulties historically. In April 2008, a USGS report estimated the amount of technically recoverable oil using technology readily available at the end of 2007 within the Bakken Formation at 3.0 to 4.3 billion barrels (680,000,000 m3), with a mean of 3.65 billion.[5] The state of North Dakota also released a report that month which estimated that there are 2.1 billion barrels (330,000,000 m3) of technically recoverable oil in the Bakken.[6] Various other estimates place the total reserves, recoverable and non-recoverable with today's technology, at up to 24 billion barrels. The most recent estimate places the figure at 18 billion barrels.[7]

New rock fracturing technology available starting in 2008 has caused a recent boom in Bakken production. By the end of 2010 oil production rates had reached 458,000 barrels (72,800 m3) per day outstripping the capacity to ship oil out of the Bakken.[8][9] The production technology gain has led a veteran industry insider to declare that the USGS estimates are too low.[10]

Geology

The rock formation consists of three members: lower shale, middle dolomite, and upper shale. The shales were deposited in relatively deep anoxic marine conditions, and the dolomite was deposited as a coastal carbonate bank during a time of shallower, well-oxygenated water. The middle dolomite member is the principal oil reservoir, roughly two miles (3.2 km) below the surface. Both the upper and lower shale members are organic-rich marine shale.

Porosities in the Bakken average about 5%, and permeabilities are very low, averaging 0.04 millidarcies—much lower than typical oil reservoirs, in today's terms a light tight oil play.[11] However, the presence of vertical to sub-vertical natural fractures makes the Bakken an excellent candidate for horizontal drilling techniques in which a well drills horizontally along bedding planes, rather than vertically through them. In this way, a borehole can contact many thousands of feet of oil reservoir rock in a unit with a maximum thickness of only about 140 feet (40 m).[12] Production is also enhanced by artificially fracturing the rock,[13] to allow oil to seep to the oil well.

History of Bakken oil resource estimates

A landmark paper by Dow and a companion paper by Williams (1974) recognized the Bakken formation as a major source for the oil produced in the Williston Basin. These papers suggested that the Bakken was capable of generating 10 billion barrels (1.6×109 m3) of oil (BBbls). Webster (1982, 1984) as part of a Master’s thesis at the University of North Dakota further sampled and analyzed the Bakken and calculated the hydrocarbon potential to be about 92 BBbls. These data were updated by Schmoker and Hester (1983) who estimated that the Bakken might contain a resource of 132 BBbls of oil in North Dakota and Montana. A research paper by USGS geochemist Leigh Price in 1999 estimated the total amount of oil contained in the Bakken shale ranged from 271 billion to 503 billion barrels (8.00×1010 m3), with a mean of 413 billion barrels (6.57×1010 m3).[14] While others before him had begun to realize that the oil generated by the Bakken shales had remained within the Bakken, it was Price, who had spent much of his career studying the Bakken, who particularly stressed this point. If he was right, the large amounts of oil remaining in this formation would make it a prime oil exploration target. However, Price died in 2000 before his research could be peer-reviewed and published. Nevertheless, the drilling and production successes in much of the Bakken beginning with the Elm Coulee Oil Field discovery in 2000 have proven correct his claim that the oil generated by the Bakken shale was still there. New estimates of the amount of hydrocarbons generated by the Bakken were presented by Meissner and Banks (2000) and by Flannery and Kraus (2006). The first of these papers tested a newly developed computer model with existing Bakken data to estimate generated oil of 32 BBbls. The second paper used a more sophisticated computer program with extensive data input supplied by the ND Geological Survey and Oil and Gas Division. Early numbers generated from this information placed the value at 200 BBbls later revised to 300 BBbls when the paper was presented in 2006.".[15] In April 2008, a report issued by the state of North Dakota Department of Mineral Resources estimated that the North Dakota portion of the Bakken contained 167 billion barrels (2.66×1010 m3) of oil.[6]

While these numbers would appear to indicate a very large oil resource, the percentage of this oil which might be extracted using current technology is another matter. Estimates of the Bakken's technically recoverable oil have ranged from as low as 1% — because the Bakken shale has generally low porosity and low permeability, making the oil difficult to extract — to Leigh Price's estimate of 50% recoverable.[16] Reports issued by both the USGS and the state of North Dakota in April 2008 seem to indicate the lower range of recoverable estimates are more realistic with current technology.

The flurry of drilling activity in the Bakken, coupled with the wide range of estimates of in-place and recoverable oil, led North Dakota senator Byron Dorgan to ask the USGS to conduct a study of the Bakken's potentially recoverable oil. In April 2008 the USGS released this report, which estimated the amount of technically recoverable, undiscovered oil in the Bakken formation at 3.0 to 4.3 billion barrels (680,000,000 m3), with a mean of 3.65 billion.[5] Later that month, the state of North Dakota's report [6] estimated that of the 167 billion barrels (2.66×1010 m3) of oil in-place in the North Dakota portion of the Bakken, 2.1 billion barrels (330,000,000 m3) were technically recoverable with current technology.

In 2011, a senior manager at Continental Resources Inc. (CRI) declared that the "Bakken play in the Williston basin could become the world’s largest discovery in the last 30-40 years", as ultimate recovery from the overall play is now estimated at 24 billion bbls.[17] (Note : the recent discoveries off the coast of Brazil should be greater, with proven reserves of 30 billion,[18] and a potential for 50 to 80.[19]) This considerable increase has been made possible by the combined use of horizontal drilling, fracking, and a large number of wells drilled. While these technologies have been consistently in use since the 1980s, Bakken is the place where they are being most heavily used : 150 active rigs in the play and a rate of 1,800 added wells per year. CRI developed a technology allowing its rigs to move a few hundred yards on hydraulic "feet", increasing the rate of well drilling.[20]

Oil production estimates

The greatest Bakken oil production comes from Elm Coulee Oil Field, Richland County, Montana, where production began in 2000 and is expected to ultimately total 270 million barrels (43,000,000 m3). In 2007, production from Elm Coulee averaged 53,000 barrels per day (8,400 m3/d) — more than the entire state of Montana a few years earlier.[21]

New interest developed in 2007 when EOG Resources of Houston, Texas reported that a single well it had drilled into an oil-rich layer of shale below Parshall, North Dakota was anticipated to produce 700,000 barrels (110,000 m3) of oil.[22] This, combined with other factors, including an oil-drilling tax break enacted by the state of North Dakota in 2007,[23] shifted attention in the Bakken from Montana to the North Dakota side.[citation needed] The number of wells drilled in the North Dakota Bakken jumped from 300 in 2006[24] to 457 in 2007.[25] Those same sources show oil production in the North Dakota Bakken increasing 229%, from 2.2 million barrels (350,000 m3) in 2006 to 7.4 million barrels (1,180,000 m3) in 2007.

The state Industrial Commission said crude production in September 2011 totaled 464,122 barrels a day, or nearly 123,000 more barrels than September 2010. Ron Ness, president of the North Dakota Petroleum Council, said the state should end 2011 with about 150 million barrels of oil produced.[26]

According to North Dakota government statistics, daily oil production per well seems to have peaked (or at least reached a plateau) at 145 barrels in June 2010.[27] Although the number of wells doubled between June 2010 and December 2011, oil production per well remains essentially unchanged. However, total oil produced continues to increase, as more wells are brought online.

Exploration and production

A number of publicly traded oil and gas companies have drilling rigs in the Bakken region, with varying asset prices, risks and potentials. These include Anglo Canadian Oil Corp.,[28]Concho Resources Inc.,[29] Abraxas Petroleum Corporation,[30] EOG Resources Inc.,[31] Continental Resources Inc.,[32] Whiting Oil & Gas Inc.,[33] Marathon Oil Corporation,[34] QEP Resources,[35] Brigham Exploration,[36] Hess Corporation,[37] Samson Oil and Gas Ltd,[38] and Statoil.[39]

Effects of the boom

The technological changes have caused a tenfold increase in the price of oil leases, which are often made for 3 or 5 year terms. But the leases typically don't run out if an oil company starts drilling, which results in a huge push to commence drilling on as many as possible before they expire. The resulting sudden boom has reduced unemployment and given the state of North Dakota a billion-dollar budget surplus. But the industrialization and population boom has also put a strain on water supplies, sewage systems, and government services of the small towns and ranches in the area.[40] [41] [42]

See also

References

  1. ^ Lexicon of Canadian Geological Units. "Bakken Formation". Retrieved 2009-03-26.
  2. ^ Nordquist, J.W., Mississippian stratigraphy of northern Montana, Billings Geological Society, 4th Annual Field Conference Guidebook, p. 68–82, 1953
  3. ^ Bakken Formation: Will it fuel Canada's oil industry?, June 27, 2008, cbc.ca.
  4. ^ US Energy Information Administration, November 2008, Technology-based oil and natural gas plays: Shale shock! Could there be billions in the Bakken?, PDF file, retrieved 16 January 2009.
  5. ^ a b "3 to 4.3 Billion Barrels of Technically Recoverable Oil Assessed in North Dakota and Montana's Bakken Formation—25 Times More Than 1995 Estimate". U.S. Geological Survey. April 10, 2008. Archived from the original on 11 April 2008. Retrieved 2008-04-11. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  6. ^ a b c ND study: 167 billion barrels of oil in Bakken
  7. ^ http://www.nd.gov/ndic/ic-press/bakken-form-06.pdf
  8. ^ "New Drilling Method Opens Vast U.S. Oil Fields". FoxNews.com. 2010-04-07. Retrieved 2011-02-23.
  9. ^ "Producers turn to railroads for shipping Bakken crude". Tulsa World. 2011-01-28. Retrieved 2011-02-23.
  10. ^ "The Virginia Gazette, Williamsburg Virginia > News > Update on oil". Vagazette.com. Retrieved 2011-02-23.
  11. ^ Diagenesis and Fracture Development in the Bakken formation, Williston Basin: Implications for Reservoir Quality in the Middle Member, by Janet K. Pitman, Leigh C. Price, and Julie A. LeFever, U.S. Geological Survey Professional Paper 1653, 2001.
  12. ^ Donald Barrs, Devonian System, in Geologic Atlas of the Rocky Mountain Region, Rocky Mountain Association of Geologists, Denver, CO, 1972: p. 98.
  13. ^ Yedlin, Deborah (2008-01-16). "Using horizontal drilling techniques in Canada". The Calgary Herald. Retrieved 2008-01-23. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  14. ^ Price, Leigh. "Origins and Characteristics of the Basin-Centered Continuous Reservoir Unconventional Oil-Resource Base of the Bakken Source System, Williston Basin" (unpublished paper).
  15. ^ Bakken formation Reserve Estimates, which is a July, 2006 Press Release from the North Dakota Industrial Commission which is part of the North Dakota State Government thus in the Public Domain
  16. ^ State of North Dakota Bakken Formation Reserve Estimates (PDF).
  17. ^ Continental statement: Bakken's giant scope underappreciated
  18. ^ "Brazil's Oil Frontier: Sub-salt drilling could net billions of barrels". Retrieved December 4, 2011.
  19. ^ "Subsalt". Retrieved December 4, 2011.
  20. ^ Continental Resources, Inc Eco-Pad.
  21. ^ Elm Coulee Field.
  22. ^ 2009 Magnolia Petroleum Current activities (PDF).
  23. ^ Measure offers oil tax rate cut.
  24. ^ 2006 North Dakota Oil Production by Formation (PDF).
  25. ^ 2007 North Dakota Oil Production by Formation (PDF).
  26. ^ Bakken helps North Dakota surpass oil production record [1].
  27. ^ https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
  28. ^ {{cite web|url=http://www.anglocanadianoil.com/current/current.html%7Caccessdate=2012-10-03%7C
  29. ^ CXO Profile | Concho Resources Inc. Common St Stock - Yahoo! Finance
  30. ^ "Abraxas Petroleum". Abraxas Petroleum. Archived from the original on 22 February 2011. Retrieved 2011-02-23. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  31. ^ "EOG Resources Inc". Eogresources.com. Retrieved 2011-02-23.
  32. ^ "Continental Resources Inc". Contres.com. Archived from the original on 23 February 2011. Retrieved 2011-02-23. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  33. ^ "Whiting Oil & Gas Inc". Whiting.com. 2009-12-31. Archived from the original on 8 February 2011. Retrieved 2011-02-23. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  34. ^ "Marathon Oil Corporation". Marathon.com. Archived from the original on 25 February 2011. Retrieved 2011-02-23. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  35. ^ "QEP Resources Bakken.pdf" (PDF). QEPres.com. Retrieved 2011-10-07.
  36. ^ "Brigham Exploration". Bexp3d.com. Archived from the original on 22 February 2011. Retrieved 2011-02-23. {{cite web}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  37. ^ Hess Corporation
  38. ^ "Samson Oil and Gas Ltd". Samsonoilandgas.com. Retrieved 2011-02-23.
  39. ^ Oil Boom Sparks River Fight: Landowners Sue as North Dakota Crude Production Reaches Missouri's Banks April 2, 2012
  40. ^ "New Boom Reshapes Oil World, Rocks North Dakota". NPR. 2011-09-25. Retrieved 2011-12-02.
  41. ^ "Oil Boom Puts Strain On North Dakota Towns". NPR. 2011-12-02. Retrieved 2011-12-02.
  42. ^ "Affidavit: Abducted Montana Teacher Strangled in Cocaine Frenzy". Reuters. 2012-02-18. Retrieved 2012-02-18.

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