Hamm see 2 million barrels per day potential
BISMARCK — As North Dakota oil production approaches the milestone of producing 1 million barrels a day, CEOs of three top Bakken companies said Thursday that’s only the beginning.
Continental Resources CEO Harold Hamm said he projects that technology advancements will push the state’s production to 2 million barrels per day.
“I don’t think that’s over the top, folks,” Hamm said Thursday, drawing applause during the final day of the Williston Basin Petroleum Conference.
Hamm and CEOs of Whiting Petroleum and Oasis Petroleum said they have up to 20 more years of drilling in the Bakken at the current pace, with decades of more oil production after that.
“We’ve got a resource life here that’s 50 to 60 years,” said Tommy Nusz of Oasis. “It’s not your father’s oil boom anymore. This is going to part of life in North Dakota for a long time.”
Director of Mineral Resources Lynn Helms, who spoke earlier Thursday, urged companies to consider the long-term impacts as they’re developing the Bakken.
“Our grandchildren’s grandchildren are going to be affected by what we do today,” Helms said. “We need to act today using the best practices that we can come up with so that that outcome four generations from now is the best possible outcome for the citizens of North Dakota.”
Companies continue to experiment with the best techniques to extract the most oil from the Bakken, such as drilling wells closer together in some areas and using new technologies for hydraulic fracturing and well completion.
Jim Volker of Whiting said industry leaders used to think recovering 10 percent of the oil was a good recovery rate, but they’re now projecting it will hit 20 percent or more.
“Ten years from now, we might be up to 40 percent,” said Volker, who said the company is piloting enhanced recovery methods.
The cumulative oil production from the Bakken recently surpassed 1 billion barrels from North Dakota and Montana. The U.S. Geological Survey said last year the Bakken and underlying Three Forks formations have up to 11.4 billion barrels of oil that is recoverable with today’s technology.
Hamm and other industry leaders have been much more bullish and predict that figure will be 24 billion barrels or more.
In addition to the Bakken, two companies are looking to develop the Spearfish formation in Bottineau County, and exploration continues in the Tyler formation in southwest North Dakota, Helms said.
The industry is “entering an entirely new era” on June 1 with the North Dakota Industrial Commission’s requirement of gas capture plans to reduce flaring, Helms said.
The CEOs said their companies each capture at least 90 percent of the gas they produce, which is ahead of the state’s average.
Whiting, for example, has two gas plants in North Dakota that process gas produced by Whiting as well as the gas produced by other companies, Volker said. Its Robinson Lake plant near Stanley is in the process of expanding.
The new Industrial Commission rules could mean production curtailments or permitting delays if companies can’t meet the requirements.
Nusz said Oasis is able to capture most of its natural gas by partnering with companies such as Whiting that have developed the infrastructure. But if Oasis felt that it was at risk of not being able to meet those rules, the company would consider making similar infrastructure investments rather than cutting production, Nusz said.
“We’ve got to control our own destiny,” Nusz said. “You don’t want to go out there and spend $150 million on (oil wells) and sit there for 18 months waiting for somebody to come and get your gas.”
During Helms’ presentation, he also called for an end of illegal dumping of oilfield waste.
“We just don’t want any more of that in North Dakota. We’re taking steps to eliminate that from the whole process as well,” said Helms, referring to new rules that will be implemented to address disposal of oilfield waste known as filter socks.
During a press conference, Hamm said Continental Resources is looking to use GPS tracking technology to aid in the prevention of illegal dumping.
“That crackdown is happening,” Hamm said.
Hamm also said the company encourages the use of contractors they trust.
“That’s always been the No. 1, to work with good people that we trust,” Hamm said.
The North Dakota Department of Health plans to issue a notice of violation against RP Services, a company hired by Continental Resources, for the illegal stockpiling of filter socks in McKenzie County.
The health department has not yet determined if it will take enforcement action against Continental Resources, said Scott Radig, director of the Division of Waste Management. An attorney for Continental has said that the company suspended RP Services.
A record of more than 4,500 people attended the conference at the Bismarck Civic Center.