"Without continual growth and progress, such words as improvement, achievement, and success have no meaning." – Benjamin Franklin (1706 - 1790)
A milestone is passed in America’s Upper Midwest: across North Dakota and eastern Montana, the Bakken shale formation has yielded its billionth barrel of oil.
The black stuff first came to the surface on April 4th, 1951, when drillers from the Amerada Oil Company struck it lucky near the sleepy settlement of Tioga. Categorised as a hydrocarbon-bearing resource by geologist J.W. Nordquist two years later, the 520,000 km2 formation would be named after Henry Bakken, the farmer who owned the land where the initial discovery was made.
Horizontal drilling began at the Bakken formation in 1988, but it would be the step change of hydraulic fracturing that would turn North Dakota into the second largest oil-bearing state in the US some 25 years later, with an average of 858,000 barrels produced per day in 2013. Incidentally, it was America's fourth oil state behind Texas, Alaska and California only 36 months previously.
The success of the Bakken has catapulted the US into second spot in the global oil production rankings, and cemented it as a member of the tripartite "Daily Ten Million Plus" club, alongside the Russian Federation and Saudi Arabia. The Bakken’s output has been meteoric, producing the majority of its billion barrel bounty in the last 13 years. Currently above a million barrels per day (bpd), production is set to peak around the 2.7 million bpd mark in 2020.
While North Dakota's oil yield has grown by 79 per cent in the past 24 months, average well decline is brutal in the Flickertail State at approximately 65,000 bpd. This equates to some 130 new wells drilled per month to offset such a dramatic production decrease. If the present trend continues, we are likely to see a daily decline rate of 75-85,000 bpd by the end of 2014.
The Bakken made up 1/12 of US daily oil production in 2013, the North Dakotan unemployment rate is 4 per cent below national average and the population of the main oil town, Williston, has doubled in size since 2010 with rental prices now topping averages in New York City and Los Angeles. Prodigious growth is a pleasing trend but it is continuous growth that halts the slip from boom town to ghost town….
Tim Haðdar is the Editor In Chief at Oil & Gas IQ. Reach Him At Twitter Or OGIQ
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