A Re-Look at the USGS Survey Two Years Later

The US Geological Survey in 2008 provided a slide show dated April, 2008 regarding the Bakken in North Dakota and Montana.

At the time, the USGS estimated 3.65 billion barrels of recoverable oil in five "assessment units" in the Montana and North Dakota Bakken Pool.

Here are the assessment units (AU), amount of estimated recoverable oil, and percent (in terms of acreage) in Montana/North Dakota:

• Northwest Expulsion Threshold AU, 868 million barrels, 80/20 (MT/ND)
• Eastern Expulsion Threshold AU, 973 million barrels, 100 (ND)
• Nesson-Little Knife Structural AU, 909 million barrels, 100 (ND)
• Elm Coulee-Billings Nose AU, 410 million barrels, 55/45 (MT/ND)
• Central Basin-Poplar Dome AU, 485, 45/55 (MT/ND)

In developing those estimates, the USGS worked with several oil companies in the Bakken as well as governmental agencies and universities. Among the oil companies involved in the assessment were EOG, Kodiak Oil and Gas, and St Mary Land Exploration (see slide 7 of the linked presentation).

What was not on the slide presentation was just as interesting. The following companies were not listed as having been involved in the assessment:

• Brigham Exploration (BEXP): now known for incredible IPs
• Burlington Resources: at the time of the survey, the number one oil producer by volume in ND
• Hess: discovered oil in ND in 1951; a major player in the ND oil industry
• Continental Resources (CLR): CEO considered by many to be the "face" of the current boom

Elsewhere, estimates of original oil in place in the Bakken Pool ranges from 300 billion to 400 billion barrels of oil. For round numbers, let's say 400 billion barrels.

The USGS survey suggested that 4 billion barrels were ultimately recoverable with existing technology, which represents just one (1) percent of original oil in place, that 400 billion barrels noted above. Again, that one (1) percent estimate was based on available technology at the time.

I doubt there is anyone that believes that one (1) percent won't change over time. Already, some folks suggest they may be recovering two to four percent of the oil reserves.

Harold Hamm, CLR/CEO, most recently, on CNBC this week, opined that eight (8) billion barrels oil is recoverable from the Bakken. Yes, that's double the original estimate of the USGS, but it's only two (2) percent of the 400 billion barrels estimated reserves.

Something tells me the eight (8) billion figure will be revised upward a year from now.