Updates
May 23, 2014: I received this as a comment, but comments are not google-searchable, so moved it here for easier access:
http://www.sys-con.com/node/3091627
This link is a little more
detailed than the Bloomberg on Williston Crossing. Note the history
of the developers of Williston Crossing. Sounds like they are legit,
have the resource funds already in place, intend to break ground March
2015 with completion date of 2017.
They have a huge history of million
of square feet of retail, malls, etc... I think this might actually be
for real.
The location is in question. If it is near the 4 mile west of
town, the only available acreage left on 2/85 going into WIlliston (west
of town) is the large parcel between the McCody concrete office
building and Schlumberger's new facilty (north side of the highway). I'm not sure if there is 228
acres? Possibly.
Otherwise, the only other land is west of the 4-mile corner on the south side of the highway (US Highway 2), between the 4-mile and Trenton-turn off? Could be interesting.
Unless they are talking about the new
interchange and bypass NORTH of Williston where Pat Murphy is planning
his North Star Center (550 acre development breaking ground in June).
The link is interesting for other reasons.
Some time ago there was a presentation suggesting how many wells might have to be drilled in the Bakken before it's all over. That presentation was removed quickly from the internet suggesting that it came from proprietary source and was not approved for general release. I don't know. "Everyone" agrees that the "new" minimum number of Bakken wells will be 50,000. Many folks now talk about numbers higher than that, but like "whisper numbers" on Wall Street are seldom found in print (for obvious reason). This link, in this update:
Rapid expansion in the petroleum sector has led to unprecedented
regional growth. Rolfstad says, the Bakken Shale currently has
approximately 8,000 operating wells, and is adding about 2,100 per year.
Given the multiple oil formations under the Williston area, and the
trend towards situating multiple wells in one location and accessing
surrounding territory via horizontal drilling, the latest thinking is
that there could be 140,000 more wells to be drilled. He says completion
times are indeed getting shorter, but there are decades of drilling
ahead of us, and after, each well can produce for upwards of 40 years.
In addition to that incredible data point, the very next paragraph:
The area's population is also growing at a swift pace -- nearly nine
percent per year through 2017 -- and will continue to grow to 159,000
over the next 10 years. According to Rolfstad, "Each oil well leads to
between one and three permanent production jobs. Drilling requires
manpower, and that workforce is here today. Production requires manpower
as well -- in fact a similar number of workers -- with a key difference
being that this workforce can settle down in one place for an entire
career. That's where we are headed."
And so it goes.
By the way, the numbers are starting to converge: a one-trillion-barrel reservoir; 140,000 wells; EURs of 500,000 bbls; 7% recovery rate. It's hard to keep track of the zeros but if you do the math, one comes to some very interesting ... should we say, coincidences?
I've posted this before: when I was last in Williston, I had an "aha" moment. The oil industry in the Bakken seemed to reach a plateau two, maybe three years ago with drilling 2,000 wells/year. The tea leaves suggest "everyone" is happy with 2,000 wells/year; over time, possibly less, but maintaining production between one million and two million bopd. My return visits to the Bakken over the past three years suggest that there are enough resources: workers, housing, rigs, pipeline, CBR terminals, etc., to comfortably manage 2,000 new wells/year. But the "aha" moment: the building continues at an incredible rate. Why? More natural gas processing plants need to be built. Permanent workers need to be in place to service the thousands of wells currently producing in North Dakota, and growing by 2,000/year. Yes, at some point, the manpower intensive drilling program will end -- but that might be 20, 30, or 40 years from now. 50,000 wells at 2,000 wells/year = 25 years. Meanwhile, each new well is going to require one to three new permanent workers. This does not include the number of opportunities that open up to "serve" these workers: restaurants, entertainment, shopping, banking, legal, medical, etc. I still think it would serve folks well to look at Calgary, Alberta, Canada, pre- and post-1947.
Original Post
A huge "thank you" to a reader for alerting me to the story.
It's hard to separate fact from fiction, the credible from the incredible, the pie in one's oven from "pie in the sky," but the Bakken never fails to provide exciting copy. If this pans out, this could be the story of the month; as fast as the Bakken seems to be moving, it is certainly the story of the hour, and
published in Bloomberg, no less (in case that link breaks,
same story in FuelFix):
A Swiss developer is planning to
build a $500 million real estate project in Williston, North
Dakota, where a surging energy industry is leading to a
population boom and rising property demand.
The two principals of developer Stropiq Inc. are at the
International Council of Shopping Centers conference in Las
Vegas this week trying to lure retailers to the 219-acre Williston Crossing project, scheduled to break ground
in March. The 1 million-square-foot (93,000-square-meter)
project will include retail, entertainment, hotel, office and
multifamily buildings.
Stropiq and investors such as KKR & Co. are rushing to
accommodate a ballooning population of energy workers in
Williston, located in the oil-rich Bakken shale formation. The
average rent for a small apartment in the western North Dakota
town is higher than in New York or San Francisco, according to
Apartment Guide. Along with housing, retail offerings in the
city are in short supply, Stropiq executives said.
“If you want anything that doesn’t exist in a grocery
store or Wal-Mart, you have to drive two hours,” said Terry
Olin, a Stropiq principal and graduate of North Dakota State
University in Fargo. “We’d like to change that as fast as we
can.”
Stropiq already has a 93-unit apartment complex under
development in Williston, with the first building scheduled to
open in July, said Ellen Simone Weyrauch, a company principal.
Folks may recall that
General (ret) Petraeus just visited Williston a few weeks ago.
The booming economy has also lured other real estate
investors, including KKR, developer of a housing development in
Williston. Minot, North Dakota-based Investors Real Estate Trust (IRET)
is building two apartment projects in Williston, the 44-unit
Dakota Commons and the 288-unit Renaissance Heights, both
scheduled to open next year.
Stropiq Inc was also mentioned in a Reuters story back on June 30, 2013:
While billions of dollars in oil
money may be rushing into North Dakota, big money has resisted financing
large real estate deals there, barring some projects entirely and
leading other developers to self-finance.
Many
would-be financiers say the North Dakota oil patch real estate market
is too hot to handle right now, with demand for housing outstripping
supply, fueling high prices. The average two-bedroom apartment in the
oil patch rents for more than $2,500 per month, helping drive land
prices sky-high and sparking concern about a bubble.
National
homebuilders such as Pulte Group, D.R. Horton and Hovnanian Enterprises
have yet to enter North Dakota. Pulte said it was focused on improving
its market share on the East and West Coasts, as well as some Midwest
states. The other two declined to comment.
Some developers have decided to write their own
checks in the meantime. Private equity firm KKR, which broke ground last
month on 330 apartments as part of a 164-acre housing development, has
yet to convince a bank to fund a construction loan. Plans for the total project include 810 apartments and lots for more than 300 single-family homes.
