The Bakken play in North Dakota and parts of Montana holds a potential 24 billion boe in oil, liquids and natural gas, according to the CEO of one of the Bakken's pioneering independent exploration and production (E&P) companies.
Continental Resources Inc.'s Harold Hamm spoke Tuesday on the financial talk show "Positively Wall Street" (www.kceoradio.com). Hamm acknowledged that two-thirds of Continental's capital investment is aimed at the Bakken. The Enid, OK-based E&P reported a $137.2 million loss for the first quarter this year, reflecting a $369.3 million loss on mark-to-market derivative instruments in the quarter.
Continental estimates a potential 24 billion boe in the Bakken, compared with Prudhoe's 13-14 billion boe, said Hamm, noting that there could be more than 48,000 wells in the fully developed Bakken. He said Continental drilled and fractured the first successful horizontal commercial well in the Bakken in 2003.
In response to a question from radio talk show host Bill Gunderson, Hamm characterized the Bakken play as very important to its region and the nation as whole, saying it is "a big, big resource [15,000 square miles] being developed with about 180 rigs in both states at this point." He said he expects the Bakken to go on for "a lot of years," and the rig count to grow this summer to about 200.
"Compared to Prudhoe, we think this is a tremendous resource being developed up in Montana-North Dakota," Hamm said. "It is very important to the nation in terms of crude oil resources that we need so desperately." He added that employment in the Bakken has jumped from 5,000 in 2005 to 20,000 now.
With a percentage of 75% oil and 25% gas in its E&P activities in the Bakken, Continental and Hamm are satisfied that the nation is taking advantage of its current natural gas boom. "The whole gas market has grown tremendously, taking over a lot in the industrial sector's demand that crude oil once held," he said.
"With the increased production of natural gas in this country, more gas liquids come with it. That's the wet portion of the gas, so you need gas drying plants, and once you do that, the liquids can be taken out of the stream and used to make a lot of products."
In terms of the nation's regulatory climate, Hamm said the E&P sector should be left alone to "do our work," and the sector also needs easier access to vast amounts of public lands, increasingly a focus of controversy between the industry and environmental organizations.
According to NGI's Shale Daily Unconventional Rig Count, a boom of activity in the Bakken/Sanish/Three Forks play has occurred over the last year. Drilling for oil and gas in the play has increased 50% from 115 rigs to 173 rigs.