The ballyhooed Bakken Shale has taken on renewed interest for its oil reserves as prices continue to climb, but it also holds a considerable amount of natural gas, which has drawn the attention by a growing number of prospectors.

The “entire play appears largely prospective and hugely economic,” Raymond James & Associates Inc. said in a Stat of the Week Tuesday. Analysts Wayne Andrews, John Freeman and Kristal Choy reported on a field trip to the Bakken that they recently took with Whiting Petroleum Inc.

“Whiting’s core area,” they wrote, “the Sanish field, happens to lie at the confluence of three trends that enhance the economics: first, the shale is at the right thermal maturity to be actively generating oil; (2) the Middle Bakken member has a well developed sitstone and sandstone sequence with natural porosity; and (3) the Sanish field is on trend with regional basement faulting, which enhances natural fractures. These qualities have made for wells that have flowed at impressive initial production (IP) rates of 1,000 to 3,000 boe/d, some of the best performing oil wells onshore U.S. In all, we concluded the trip with a better knowledge of geology in the North Dakota Bakken and a significantly enhanced outlook for producers and service providers exposed to the potential from the play.”

The Bakken Shale extends from the east part of Montana through most of North Dakota, crossing the Williston Basin. Operators in the Bakken are finding the most success to date in the Three Forks/Sanish formation (TFS), which is immediately below the lower Bakken. “A few wells have been drilled down to the TFS with some very encouraging flow rates, which may add meaningfully to resource potential from the entire area,” said the Raymond James team. A U.S. Geological Survey (USGS) reevaluated the Bakken three years ago and estimated that it possesses 3-4.3 billion bbl of “undiscovered, technically recoverable” oil and 1.85 Tcf of natural gas. The formation also is estimated to hold 148 million bbl of natural gas liquids.

EOG Resources Inc., which has around 320,000 net acres in the play, was encouraged enough by its initial results in the Bakken to redirect some of its capital to explore for oil in its extensive leasehold this year (see Daily GPI, Feb. 29). Marathon Oil Corp. in April 2006 completed a series of land acquisitions totaling almost 200,000 leasehold acres in the Bakken (see Daily GPI, April 26, 2006).

Whiting has accumulated almost 101,000 net acres in the North Dakota Bakken, with wells generating estimated ultimate recoveries of 400,000-900,000 boe/d, Raymond James noted. Continental Resources is said to hold the largest position in the play, around 350,000 net acres. Continental’s seven-day IP rates have historically averaged 300-500 boe/d, but it is improving well performance with wells at rates now between 600 boe/d and 700 boe/d, said analysts. Brigham Exploration holds 187,000 net acres there; Encore Acquisition has 178,000 net acres. In addition, Questar Corp. has about 60,000 net acres, while Kodiak and Enerplus Resources Fund both hold about 30,000 net acres.

“Needless to say, drilling success — combined with strong crude prices — has spurred an acceleration of activity in the North Dakota Bakken,” said the Raymond James analysts. “Clearly, the North Dakota Bakken has shown indications of becoming one of the largest oil-producing basins in the U.S.”

Williston Basin Interstate Pipeline Co. (WBIP) plans to launch a open season in mid-June for the Bakken Pipeline, a 100-mile pipe that would transport gas from the Bakken Shale to an interconnect with Alliance Pipeline (see Daily GPI, May 21). The proposed 16-inch diameter pipeline would originate at an interconnect with WBIP’s existing system in Mountrail County, ND, and run northeasterly to interconnect with Alliance in Bottineau County, ND. Initial capacity would be 100 MMcf/d with flexibility to expand to 200 MMcf/d. Service could begin in mid-2010.

According to a recent report by the Department of Interior’s Bureau of Land Management (BLM), the Williston Basin contains more than a million acres of federal land that is not accessible or that has restricted access (see Daily GPI, May 22).

The BLM estimated that around 26% (1.4 million acres) of the basin’s federal land is not accessible, and it contains 34% (124.1 million bbls) of the federal oil and 34% (212.7 Bcf) of the federal natural gas in the basin. About 41% (2.1 million acres) of the federal land is accessible with restrictions beyond standard lease terms, which contain 38% (140.6 million bbls) of the federal oil and 27% (165 Bcf) of the federal gas. An estimated 32% (1.7 million acres) of the federal land is accessible under standard lease terms, which contain 28% (102.3 million bbls) of the federal oil and 27% (165.3 Bcf) of the federal gas.

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