Billionaire Harold Hamm is convinced thereʼs 24 billion barrels of oil to be coaxed from the Bakken field of North Dakota and Montana. Continental Resources has already prospered from Hammʼs Bakken bet—shares are up 250% since early 2009. Hammʼs 72% stake is worth $8 billion. Hamm currently has 25 of the 175 rigs working the Bakken. In the past year Continental’s Bakken output has exploded 70% to 28,000 barrels per day.
Operators like Continental, EOG Resources, Hess Corp., Occidental Petroleum and Marathon Oil have drilled some 3,000 wells there since 2008, and learn more on each one. A primary discovery: that just 100 feet below the primary Bakken formation (itself 10,000 feet down) is a whole other layer of oil-bearing rock called the Three Forks, which is separate from the Bakken and sealed off by a layer of shale. Watching flow rates, the companies agree that the average well drilled into either layer will produce around 500,000 barrels of oil in its lifetime.
Hammʼs number is aggressive because his drilling technique is aggressive. Most analysts and operators assume one well per 640 acres of reservoir. Too conservative. Continental has developed a new drilling concept it calls Eco-Pad to exploit both reservoirs. One rig will develop a 2-square-mile area by drilling eight wells—four into the Bakken layer and four into the Three Forks. Each well goes down two miles, then horizontally two miles through the reservoir. Using explosive charges, the drillers will make hundreds of holes (called “perforations”) in the pipe of each well. Then comes the hydraulic fracturing— where the well is injected with 1.8 million gallons of water and sand that props open tiny fractures in the dolomite rock to let out the oil. The “Eco” in this Eco-Pad concept? All this work on eight giant wells gets done from one spot, causing less surface impact.
From there, itʼs simple arithmetic. The basin covers about 8 million acres. Hamm figures there’s room for 48,000 wells. If each one delivers that 500,000 barrel average, you get 24 billion barrels. Even then, drillers will be harvesting well less than 10% of what geologist Edward Murphy of the North Dakota Geological Service figures is 250 billion barrels of original oil in place. The Williston basin is churning out 450,000 bpd now. Within four years, says Hamm, it will be producing 1.2 million bpd — as much oil as is currently recovered from the entire U.S. side of the Gulf of Mexico.
Injecting the greenhouse gas underground could produce 40 billion barrels of oil in the United States, Evans said.
A DOE estimate is that enhanced oil recovery (nextgen CO2 injection) could unlock 240 billion barrels of oil.
This would involve hundreds of billions of investment if not trillions of investment. There would need to be massive pipeline projects to take captured CO2 from coal plants to oil wells.