North Dakota’s claim to oil fame has long been the Bakken shale, one of the top shale plays in the country. The Bakken is considered a rather mature play, but now, studies by researchers with the state’s Department of Natural Resources have opened up the prospect of a second life for the Bakken.
It is called Three Forks—a reservoir that lies within the Bakken shale play and may contain as much as 250 million barrels of crude as of yet untapped. And that oil is not too deep in the ground either, the researchers determined.
“The Three Forks Formation is a prolific unconventional oil and gas reservoir within western North Dakota and has been the target of approximately 8,000 horizontal wells through ~mid-2023,” the North Dakota Department of Natural Resources reports in an info sheet on the deposit. It goes on to note that most of the wells already drilled in the Three Forks Formation were drilled in the upper strata of the formation. In the middle layer, some 340 wells have been drilled, and in the lower layer, there have been only 50 wells drilled so far.
The reason is simple enough. Since the discovery of the Parshall field in the Middle Bakken back in 2006, most drilling has been concentrated there. Then the upper Three Forks followed between 2008 and 2010. In the early 2010s, drillers moved on to the middle Three Forks, with some 360 horizontal wells drilled there to date, producing around 92 million barrels of oil and 238 billion cu ft of natural gas. That only represents a modest 2% of the overall drilling activity in the Bakken play and less than 2% of total output.
What the state’s researchers did was evaluate existing wells in the area. They found sufficient evidence of untapped oil in most of the wells they studied. All in all, developing these reserves would require the drilling of 600 more wells in the Three Forks play—and outside it because the reservoir extends beyond it, according to the data.
“There have been about 20 wells drilled in this middle Three Forks unit per year for the last six years, but it probably should be double to triple that,” one of the researchers involved in the study, Tim Nesheim, told Inforum.
Nesheim added that many drillers may have assumed that additional drilling in the area would only lead to faster production of oil and gas rather than higher production. That assumption, he said, was inaccurate. “After we (Nesheim and Starns) did our work, we believe that it's more than that, that when you drill middle Three Forks wells, you're getting more oil out of the ground long term,” the researcher said. “You're not just speeding up your recovery, but you're adding to your long-term recovery.”
“We’ve done some of the research, and our hope is that companies will take our work and build on it, kind of giving them enough of a head start to do more,” Nesheim also told the North Dakota publication.
The results of the study add to the growing body of evidence that U.S. shale can still surprise with undiscovered resources, even as more and more reports emerge suggesting that prime acreage in the shale patch is running out. Indeed, some resources are being exhausted, but the North Dakota news suggests that there is still plenty of crude to keep the U.S. producing at or around current levels for years.
The first stage of the shale industry's evolution is clearly over. That was the age of “Drill, baby, drill” when nothing mattered but trying to see just how much oil one could get out of the ground, expenses be damned. It was also the age of the massive debt piles, the cash-burning, and the increasingly grumpy shareholders.
Now, the industry has moved on to the age of fiscal discipline, with production growth a lot more moderate, not only because some reservoirs are maturing and beginning to get depleted but because of a change in priorities, from production at all costs to shareholder returns at all costs.
Even in this new environment, however, there have been surprises. Last year, supermajors reported record oil and natural gas output from the top shale basin, the Permian. They also spoke of their plans to raise that output even further. Meanwhile, independents were boosting their own guidance after seeing higher volumes and lower cycle times to bring wells online in the first half of 2024.
Most of those gains were the result of efficiency improvements, but these efficiency improvements cannot be sustained on a permanent basis. Sooner or later, drillers will run out of space for efficiency gains. The prospect of untapped resources getting discovered yet in the shale patch, on the other hand, means more oil and gas for longer.
By Charles Kennedy for Oilprice.com
