This Is Not An Investment Site But One Learns A Lot About Folks' Understanding of the Bakken Through Comments on Investing

This is not an investment site, and no one should use my opinions, thoughts, ramblings, etc., to make investment decisions. I take the Bakken seriously; I don't take investing as seriously as I should ... in fact, if the investing element disappeared tomorrow, my interest in the Bakken would not wane.

When I started the blog, I had no plans to include information regarding investments or even money for that matter with regard to the Bakken. I was just trying to understand the Bakken and educate myself. I had planned to keep it private, but then thought others might enjoy it, and through feedback, I might learn more.

However, over time, it was obvious -- and I have blogged this before -- that to really understand the Bakken, one could not ignore the investment side, or the money side, of the Bakken.

Naysayers regarding the Bakken, and naysayers regarding specific companies in the Bakken, have one common theme or concern: sustainability.

That concern speaks volumes.

Several points regarding sustainability:

• Companies that got in early paid, on average, less than $500/acre, and some much less; acreage now easily goes for $6,000/acre in the better Bakken
• The early thinking was that there would be one well per section; it is now obvious there will be as many as 7 wells per spacing unit in the better Bakken (some spacing units are still 640 acres; new spacing units are 1280 acres)
• Everyone in the industry agrees the North Dakota Bakken is in the early stages (assuming no geopolitical debacle)
• The North Dakota Bakken has become the "gold standard" against which all other new onshore unconventional plays are measured
• The Bakken infrastructure is in place: largest microseismic array in the world; UND core sample library second to none anywhere in the world; takeaway capacity exceeds production; flexible takeaway capacity (rail, truck, and pipeline); a good regulatory climate
• About 3,000 Bakken wells have been drilled (+/- a thousand); 2,400 wells through the end of 2011
• Estimates range from 15,000 to 88,000 more Bakken wells to be drilled
• There are currently 6,000 producing wells in North Dakota; there are about 100,000 wells in California; North Dakota is on a trajectory to surpass California in oil production by the end of this year (three months)
• Everyone in the industry agrees that there is at least two more decades of drilling (this does not include secondary or tertiary recovery; this does not include other pay zones)
• General consensus: the average EUR in the Bakken is estimated to be somewhere between 500,000 - 600,000 bbls (that's an average)
• UND experts suggest that once the last Bakken well is drilled, production will continue another 70 years
• A single gusher in the Bakken "won't move the needle" for XOM/XTO
• A single gusher in the Bakken "will move the needle" significantly for KOG
• There are more "KOG-like" companies in the Bakken than there are XOM/XTO-like companies in the Bakken (the point: a lot of opportunities for investors with long term horizons)
• Williams Cos (WMB) entered the Bakken when they bought 7 percent of the mineral rights in FBIR
• Schlumberger is building a huge double-digit million dollar complex west of Williston
• Halliburton with already the biggest complex in Williston is now adding on; I was told the original complex was $30 million (it might have been $20 million or more than $30 million; I can't remember)
• Bakers Hughes "supersite" west of Williston will be the biggest building in North Dakota of that type; BHI is building three such complexes: Williston, Minot, Dickinson
• There are three CRYO sites going up west of Williston, each of which is about 15 times larger than the single site the company constructed in Haifa, Israel, six years ago
• North Dakota is widening US 2 south of Williston; decision was made in a political nano-second and will be completed almost as quickly; I think it was started even before the President could say "shovel-ready"; in fact, I don't think the project was shovel-ready; the workers were shovel-ready
• McCody Concrete, a local company, west of Williston, may have just put up the largest concrete building in the four-state area
• North Dakota state's decision for a northwest state water authority took a bit longer to sort out, but once decided, work began immediately and the project is well under way; this is a $150 million project
• There is now talk that the Bakken pool, perhaps the TFS, extends much farther east and farther north than originally discussed

As stated earlier, this is not an investment site, but ... I lost my thought -- I saw a commercial for the Chevy Volt ... well, enough of this...

More ramblings later...

Oh, now I remember. There are a lot of naysayers when it comes to the Bakken and to specific companies in the Bakken, but there are a lot of folks putting their money into the Bakken everyday. And not trivial amounts.