SeekingAlpha: Appraisal of the Bakken -- A Must Read

Link here.

A must read for all those interested in the Bakken,

The title and thesis of the article: the author questions whether the Bakken might be the model for worldwide development of shale oil just as the Barnett was for natural gas.

Some data points from that article.

Barnett shale

• Inspired one of the fastest growing energy industries ever created in North America
• On the verge of propelling a multinational industry
• Barnett inspired the dry gas industry but also inspired a sub-industry based on the unsuspected liquids window in the gassy shales
• The production of gas liquids and oil from these liquids windows is spreading across several basins in North America
• Mostly likely this will lead to US liquids production being higher at the end of the decade than it is now (contrary to "Peak Oil theorists").

Question: could the Bakken be the "Barnett" of the oil shales

Colorado "oil shales"

• Misnamed
• Kerogen shales
• Production is a water and energy intensive mining and retorting industry
• Kerogen shales have been well studied for decades
• Found in over 40 countries worldwide (large reserves in US, Russia, China, Jordan, Israel, Morocco)
• Kerogen shales: substitutes for coal, not crude oil.
• A central power plant fuel, not a transportation fuel.
• Not economical to transform kerogen in to fuel oil compared to converting natural gas and/or coal

North Dakota and Alberta Bakken

• True oil shales
• Production is drilling -- horizontal, multi-stage fracking
• Oil shales have not been studied for decades as kerogen shales have

The Next Bakkens

North Dakota Bakken

• Official estimate: 11 billion barrels (previous estimate: 4.3 billion barrels)
• CLR estimate: 24 billion barrels of recoverable oil
• US govt: estimates that total US crude reserves at the end of 2009 were only 21 billion barrels
• Estimate: 170 billion barrels of oil in place in North Dakota

Australia

• Georgina Basin: may be similar to the Bakken
• Exploratory wells have been drills
• Estimates: 5 - 11 billion barrels in one locale in the Southern Georgina
• The Arthur Creek shale formation in the Southern Georgina is very similar to the Bakken but about 5 times the thickness
• All 18 exploratory wells drilled so far have shown oil
• Another "Bakken" may have been discovered; 15 - 18 months before we know

France

• Paris Basin
• Covers the northern half of France and extends into neighboring countries
• Vintage oil and gas basin: over 2,000 wells drilled and 52 oil fields discovered
• Three oil shale formations: Lower Lias, Amaltheus, and Schistes Carton
• Current focus: Lower Lias -- current estimate -- tens of billions of barrels
• Other two formations: significantly higher estimates
• Companies involved: Vermillion Energy, Realm Energy, Torreador Resources (partnered with Hess)
• Estimate of oil in place 100 billion barrels from source rock; 30 billion in the Lower Lias
• Torreador will drill 6 wells in the Paris Basis in 2011: 2 vertical, 2 horizontal, 2 combination

Bottom Line

• In less than 2 years we should know whether there are other "Bakkens" outside North America