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Oil well below Bakken shows promise

June 17, 2008
By JAMES MacPHERSON, Associated Press
    BISMARCK — A single successful oil well tapped below the Bakken shale formation in western North Dakota has spurred speculation that a separate — and perhaps rich — oil-producing reservoir may be buried in the state’s oil patch.


    Enid, Okla.-based Continental Resources Inc. says its new oil well in Dunn County produced an average of about 700 barrels of oil a day during its first week of production last month.


    It was Continental’s first well in the Three Forks-Sanish formation, said Harold Hamm, the company’s chairman. The formation is made up of sand and porous rock directly beneath the Middle Bakken, which lies two miles under the surface in western North Dakota and holds billions of barrels of oil.


    Hamm, who also is a geologist, said his company has a dozen oil rigs working in North Dakota and owns about 300 wells.


    The company owns 41 percent interest in the new well. Hamm said it rivals production of the company’s top-producing wells in the Bakken.


    ‘‘It’s a very nice well,’’ he said Monday.


    Continental Resources stock rose $11.78, or 23.1 percent, to $62.84, after the company reported the production results of the well on May 20.


    Hamm said Continental is the largest leaseholder in the Bakken Shale, with more than a half-million acres in North Dakota and Montana. Most of the acres are in North Dakota, he said.


    The company also has wells in Oklahoma’s Woodford Shale, he said.


    Continental has increased its drilling budget this year to $783 million, or $167 million more than originally planned, Hamm said. Most of the drilling will occur in the Bakken, but the company also will target several more wells beneath it.


    Hamm said each well in the Bakken or the formation below it costs more than $5 million to drill.


    While the Bakken has proven successful to Continental and other oil companies, Hamm said his company is basing its plans on the Three Forks-Sanish formation with just one well.


    ‘‘Our company has a data point of one, that’s it,’’ Hamm said. ‘‘We have no way of knowing how extensive it may be at this time.’’


    The Three Forks-Sanish formation was first targeted in the 1950s, in an oil play known as the Antelope Field in McKenzie, Williams and Divide counties in northwestern North Dakota, said Julie LeFever, a geologist with the state Geological Survey in Grand Forks.


    LeFever, who has studied the Bakken formation for more than two decades, said she’s not surprised of the renewed interest in the Three Forks-Sanish formation, which runs from western North Dakota and into Canada.


    ‘‘I think it is the next step,’’ LeFever said. ‘‘Now there is realization that there is potential away from the Bakken.’’


    The Bakken Formation encompasses some 25,000 square miles in North Dakota, Montana, Saskatchewan and Manitoba. About two-thirds of the acreage is in western North Dakota, where the oil is trapped in a thin layer of dense rock nearly two miles beneath the surface. Companies target the shale horizontally, and use pressurized fluid and sand to break pores in the rock and prop them open to recover the oil.


    In April, the U.S. Geological estimated that up to 4.3 billion barrels of oil can be recovered from the Bakken using current technology.


    The potential of the Three Forks-Sanish formation was factored into the agency’s estimate for the Bakken, though it was based on production from the Antelope Field, said Rich Pollastro, a USGS geologist.


    Pollastro said only about 50 wells have tapped the Three Forks-Sanish formation in the past, and all have used conventional vertical drilling. He said Continental’s well was the first to use horizontal drilling techniques that have been successful in the Bakken.
 
 

 

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