From the Billings Gazette:
Some 50 Billings businesses are busy answering the calls from 350 oil companies hungry for workers, trucks, pipe and more, so they can keep pumping crude out of Eastern Montana and western North Dakota.I don't think I was alone when I thought the surge in the Bakken was coming to an end and we might start to see a leveling off of activity.
The stakes are high: an estimated $1.5 billion is being spent each month drilling in the Bakken.
In fact, ties to the Bakken boom are so strong in Yellowstone County that the air carrier Silver Airways, formerly called Gulfstream International, is considering adding a direct flight to Williston, N.D., from Billings.
That thought was fostered by all the talk of operators entering the "manufacturing phase" in the Bakken. We may have been entered the "manufacturing phase" but it is clear that does not mean the end of the surge. After all, now the "factories have to be built.
Many months ago I had read, maybe even posted there were 350 oil-related companies in Williston. The linked Billing Gazette story confirms that.
Data points from the article:
- 200 rigs in the Bakken
- Nine rigs on the Montana side with more coming
- CLR plans to drill 400 wells around Richland County
- Eleven-mile stretch from Fairview to Sidney, one night: 155 trucks
- Sidney at 10,000, could double in a couple of years
- Bainville population of 150 has doubled; same with Culbertson and Plentywood
- Sewer systems maxed out everywhere
- Nemont Telephone is working on 23 building projects around Williston
Former Kalispell trucker Berosik, who's seen a lot of cities during his 1.5-million-mile career, said the "the nicest, cleanest town around" has fallen victim to runaway development.
"Used to be you'd drive into Williston, and if you needed a hand, they'd be happy to help you," he said. "Now they won't even look at you, and you can't blame them."
I don't understand when people say the bakken is going to level off since it in the "manufacturing phase". You are right when you say they have to build the production facilities, but lets look at the transition that will occur. 200 rigs have 125jobs per rig. 25,000 jobs. Each new well creates 1-2 new permenent jobs. So in the next 15 years, 30,000 new wells are drilled. And lets assume driling stops. the 25,000 drilling jobs leave, but are replaced with 30,000 to 60,000 jobs to maintain and operate the wells. Now lets be optimistic. Lets say the rig count drops in half in 10 years, we then have the drilling jobs and service jobs. In addition all the other opportunity that is created.
ReplyDeleteIts just starting......
You are absolutely correct; the surge is not yet over.
ReplyDeleteI think that's what I forgot and a lot of other folks forgot: the permanent jobs that new wells, and new gas gathering plants create.
Many of us, including me, incorrectly thought that as the number of rigs leveled off, there would still be growth, but the surge would have tapered off.
It certainly looks like the surge continues.
Just after posting the above comment, someone wrote to remind that the Tyler is yet to be targeted in any meaningful way. Remember: bonuses as high as $14,000/acre have been paid for leases suggesting multi-pay zone wells or multi-well pads targeting multiple pay zones: Bakken, Three Forks, Tyler.
ReplyDeleteThere is also talk of exploration continuing farther east along I-94.
In reality is the only formation the experts like Lynn Helms, Ron Ness or Harlold Hamm can say they have a fairly good idea of is the Bakken and to some extent the Three Forks. All Hamm says about the other formations is the science hasten been done on the other formation. He will say they have great potential. He is not ready to put a recovery figure on them like the Bakken.
ReplyDeleteNess says the boundaries keep pushing out and they find more economically recoverable oil.
Lease prices will depend on what a company is willing to pay and if they can reasonable secure
the lease or they may gamble on selling it to someone else. If the price gets too high they may choose to let it cool off and concentrate on development of their secured acreage. They also may look at other shale plays that don't have the notoriety of the Williston Basin but have a good potential and the lease prices are not as high.
I believe that 2012 will bring numerous drillings in the Eastern Montana area, espcially in Richland, Roosevelt and Sheridan Counties. These towns such as Culberson and Sidney might experience the same influx of newcomers as did Williston. Further, I feel that the clock is running on these leases in regards to expiration dates as most were leased back in 2008. Result, the mineral owners should be able to negotiate some outstanding leases which means more $ in thier pockets with better royalty %'s.
ReplyDeleteI wonder if Shell will come back now? Best article from 2006, a must read. fun to reflect
ReplyDeletehttp://www.post-gazette.com/pg/06095/679602-28.stm
Very interesting map showing old dry holes in Mercer county from the 80's? I believe they were dry by not hitting pools, with todays fracking who knows? They put in a lot of holes, must be something down there, I think old geology records reveal the oil shale. I bet this area is now getting the strong second look.
ReplyDeletehttp://www.eser.org/wildcat-field-horning-1-anadarko-production-co-mercer-county-north-dakota-144n-89w-4
I've written about Findley before -- a long, long time ago, it seems, but it's such a great story, I posted your link as a stand-alone post. Thank you.
ReplyDeleteI think you are correct. That was true of the Bakken, also. Horizontal drilling helped, but it wasn't until they combined hz drilling AND fracking that made all the difference in the world.
ReplyDeleteAnd to some extent, it was BEXP more than anyone who pushed the envelope on maxing out number of stages.
Replies to comments are out of order. Hopefully folks can sort them out.
ReplyDeleteAll cities in the area will grow (Sidney, Fairview, Culbertson, Watford City, etc) but Williston will remain the heart of the Bakken. One only has to visit the many industrial parks in and around Wiliston to see why this is true. It's a very interesting phenomenon.
Just to give you an idea of my experience. I am from Minot and working on a housing development. The demand is overhelming and its coming from all directions. My expectations was to provide housing for oil workers from the west, but the phone calls are from busineesses from the east (Minneapolis, Sioux Falls, Detroit, Chicago) that want to move to the bakken.
ReplyDeleteThe other item to note. I own mineral acres 10 miles east of Minot. I received a call from a land man wanting to lease the acres. He indicated the company who he wouldn't disclose is leasing a lot of acres. This is the first time since the early 80's that the family has been approached to lease the mineral acres. Everything talked about is the Bakken and 3 forks. As noted 18-19 other formations exist in ND with known recoverable oil. Its just a matter of getting the process down to extract the oil in a manner that is profitable. 5 years ago the Bakken was figured out. 5 years from now, other formations will be figured out. With each formation, the manufacturing build out will be done over and over......
Yes, and right now, I'm most excited about:
ReplyDeletea) the Tyler formation in southwest North Dakota
b) Chesapeake's work in southwest North Dakota
c) the resurgence of the Madison (may be several years)
d) the Lodgepole north of Williston
Bakken and Three Forks are starting to seem routine. For the Bakken and Three Forks it seems, it's all about cost containment. They know the oil is there and how to get it; now it's just a matter of doing it most effectively.
Own property in Miles City in the VERY BEST spot........just beside I-94 interchange. Want to build a 50 unit econo motel............anyone reading this interested?
ReplyDeletePlease connect with me......Rob Shipley, Box #1512, Miles City, Montana 59301...406-234-2477....ship@midrivers.com
Since not everyone reads the comments, I will place this as a stand-alone post. Good luck.
DeleteAnd you are correct; this is a fantastic location -- head up the road northeast to Sidney, Williston; or, head east to Baker, a center of natural gas activity.