McKenzie County Farmer - Archive

By Tina Foreman
Farmer Staff Writer

With only eight active drilling rigs in McKenzie County as of Oct. 5, 2009 compared to 20 active rigs one year ago, it doesn’t seem like oil activity in the county is on the rise. But according to area officials, things are picking up.
With the price of oil hovering between $65 and $70 per barrel compared to $62 per barrel on Oct. 27, 2008 one would expect things to be more active than they are.
“We are seeing continued expansion of the activity as we enter the fourth quarter,” says Ron Ness, North Dakota Petroleum Council president. “It is likely that some of the budgets companies had for gas plays will be shifted to the Bakken this quarter which should cause things to pick up some.”
A big concern for companies is the cost of hauling oil out of North Dakota. With a pipeline in the works, it is likely that production will pick up once more pipelines are available in early 2010.
“Export capacity continues to be a pressing issue,” adds Ness. “The success of the Bakken play is attracting more investment and hopefully, more infrastructures will follow. Not having a market for the oil is one variable that can dramatically slow down investments. But I am confident that the needed infrastructure will be built and this won’t be a problem.”
As companies focus on infrastructure issues and the Bakken play, the Three Forks Sanish (TFS) Formation continues to be the big unknown.
“It’s exciting that we have another target,” comments Ness. “Only time and investment can determine the ultimate success of the TFS Formation, but I’m hopeful it will expand the success of the Bakken play. Whether the TFS and Bakken are separate formations doesn’t matter as long as the formations produce more net oil.”
As long as McKenzie County continues to have companies like Continental Resources, which is expanding its operation and technology in the county, oil exploration and investment should continue to rise.
“We decided to drill the first wells using our new Eco-Pad concept in McKenzie County because the opportunity presented itself,” says Jeff Hume, Continental Resources chief operating officer. “The Bakken and Three Forks wells we’ve drilled there have been successful and we think our success will continue there.”
The Eco-Pad Concept allows four wells to be drilled on one pad or location. Prior to this concept, Continental Resources needed one pad for each well it planned to drill. The company has eight additional permits pending with plans of continued drilling in McKenzie County.
“The pace of activity appears to be picking up rapidly,” adds Ness. “Landmen are working, companies are making plans to pick up more rigs and leases are beginning to expire, which creates a sense of urgency.”
As the price of oil continues to steady out around $70 per barrel and technology increases, Ness and others in the industry are excited to see 2009 end and 2010 begin.
“Get ready,” says Ness. “From everything I see and hear, it’s going to get crazy busy in 2010.”