On April 30, 2013, I said that "another Bakken" had been discovered with the reassessment of the Three Forks. At the time I wrote that headline, I was a bit worried that I had stretch it a bit. It turns out Rigzone picked up on the theme:
Q: What's the next Bakken?
A: That's a tough one. In a sense, we've already seen it with the Three Forks reappraisal. But it would be exceedingly difficult to replicate the Bakken, with its vast areal extent and thick pays.I find that very, very interesting. With prospects like the Eagle Ford, the Permian, the Cline, the experts are still betting the Bakken will be the "gold standard."
And take a look at this. If you think IPs are already spectacular, Rigzone is suggesting we haven't seen anything yet. And although this is not an investment site, it's interesting that in this very long internet article, CLR was the one Bakken-centric company highlighted.
Q: The US government recently more than doubled its estimates for Bakken and Three Forks to 7.4 billion barrels of undiscovered and technically recoverable oil and 6.7 trillion cubic feet of natural gas. How is the industry responding to this? How are investors responding?
A: Some operators had already been developing the Three Forks formation ahead of the USGS revised estimate for the Greater Bakken play. That drilling in fact provided much of the knowledge about the Three Forks that led to the USGS upgrade. We're already seeing stepped-up drilling in the Three Forks, and some of that will entail dual horizontal laterals, a real milestone that could yield spectacular IP rates. Accordingly, Wall Street analysts are upgrading their guidance on companies such as Continental Resources that are leading the Bakken charge.
For the next Bakken play would be Green River Formation.
ReplyDeletehttp://en.wikipedia.org/wiki/Green_River_Formation
It is wikipedia but if you scroll down to oil shale it talks a little about it.
Here is an abc news article from last fall talking about it.
http://abcnews.go.com/Business/american-oil-find-holds-oil-opec/story?id=17536852#.UbIV9OfVCik
There was a congressional hearing a year ago about this particular formation also. I also read a more informative article in Wyoming Business Daily which I can no longer get a link but have the entire excerpt below... You may want to edit this to prevent "copyright" issues?
From the Wyoming Business Daily
Green River Formation contains 3 trillion barrels of oil
By Mark Wilcox
May 15, 2012 --
An auditor told Congress last week that the Green River Formation in Wyoming, Utah and Colorado contains about as much oil as the "entire world's proven reserves," making it the "world's largest deposits of oil shale."
The formation is largely — about 75 percent — on federal Bureau of Land Management lands in the states, making it possible for the government to extract funding from the shale formation almost as well as the companies that may extract the oil.
Anu Mittal, director of natural resources for the federal General Accounting Office, said the U.S. Geological Survey estimates 3 trillion barrels of oil in the 1,000-foot sedimentary rock formations under the three states. She said about half of the payload should be technically recoverable, "depending on available technology and economic conditions."
The standard royalty rate for a company to extract oil on federal lands amounts to 12.5 percent, and has been in place since the 1920s, according to Secretary of the Interior Ken Salazar, who said he is studying how to up that royalty in the future.
Assuming static prices of oil and equal distribution of recoverable shale, at about $100 per barrel, extraction of 75 percent of 1.5 trillion barrels of oil would net more than $14 trillion for the federal government, or about $2 trillion shy of the national debt.
And that says nothing of state severance taxes or other windfalls for government. But Mittal also voiced a warning about possible development.
"While large-scale oil-shale development offers socioeconomic opportunities, it also poses certain socioeconomic challenges that also should not be overlooked," she said. "Oil shale development, like other extractive industries, can bring a sizable influx of workers who, along with their families, put additional stress on local infrastructure. Development from expansion of extractive industries has historically followed a boom-and-bust cycle, making planning for growth difficult for local governments."
Additionally it can stress local water resources.
"Developing oil shale and providing power for oil shale operations and other activities will require large amounts of water and could have significant impacts on the quality and quantity of surface and groundwater resources," Mittal said. She also said development puts at risk air quality and certain land and aquatic species.
Thank you.
DeleteI will post much of this to a stand-alone post so it more easily searchable. This is an incredible bit of information. I was unaware of it; once I get a stand-alone post, it will be linked at the sidebar at the right under "Other Formations."
It also explains recent stories on OPEC being concerned about shale potential in the US. Even though this is BLM-constrained, at some point it becomes available if "push comes to shove."
Thank you for taking time to send such an involved post. Thank you.