The concentration of oil-field drilling rigs moving much farther east than they used to be is making the oil industry an important part of Minot's economy and a big driver, says a North Dakota energy expert.
"A big part of that is it takes 800 semi loads of drilling rig and materials to drill and frac (fracture) each one of those wells over a one-month period," said Lynn Helms, Bismarck, director of the North Dakota Department of Mineral Resources.
"If you can imagine a fleet of semis circling around these rigs one semi load an hour for 45 weeks supplying one of those drilling rigs. That's why there's so many trucking companies and so much going on in and around the city of Minot," Helms said.
A jar of North Dakota light sweet crude oil, center, Broom Creek Formation, left, a bright red sandstone, and samples of Bakken and Three Forks formations, in back, are among the items displayed at a recent presentation in Minot by Lynn Helms, director of the North Dakota Department of Minerals.
The hottest topic of the day is the Bakken and the Three Forks Formations, Helms said.
About three weeks ago, 112 drilling rigs were running across western North Dakota. As of late Thursday afternoon, the North Dakota Oil and Gas Division, a division of the N.D. Department of Mineral Resources, reported that number had increased, with 124 active drilling rigs.
"They're just west of here," Helms said, when he spoke to the Minot Kiwanis Club recently.
How the formation was named
People always ask where the Bakken name came from, Helms said.
He said the name came from a family in the Tioga area. He said usually an oil formation is named after where it comes to the surface. "But Bakken does not," he said.
Helms said the formation was named after a well that was about 300 feet from the kitchen window of the Bakken family's home. He said Mary Bakken was 83 at the time and her two bachelor sons were in their 40s. She had 13 children and left the mineral rights to her two bachelor sons.
Helms met one of the sons, Henry, when he started working for Hess Corp. in Tioga. He said Henry Bakken pulled a newspaper article out and told him and the other young engineers how much oil was under his farm and that the young engineers needed to find a way to extract that oil.
"Well, technology has finally caught up to Henry and Harry, and here we are," Helms said.
He said most of the wells about 2,000 wells have gone in the Bakken Formation.
"The new kid on the block is this Three Forks which is underneath it and the top 50 to 75 feet of that is saturated with Bakken oil as well," Helms said.
Helms, who had with him that day a jar with dark-colored North Dakota light sweet crude oil, said, "This is the stuff that everybody's excited about. This is the stuff that we've got 4 billion recoverable barrels of in the state of North Dakota with a value of somewhere around $500 billion."
Generating money, jobs for area
"It's generating almost $2 million a day in oil and gas extraction taxes, it's generating thousands and thousands of jobs," he said.
"Those 112 drilling rigs are each investing about a dollar a second," Helms said, referring to the number of actively drilling rigs that particular day. "It costs about a dollar a second to drill and complete a Bakken well so in the time it took me to say that they invested $11,200, and that is what is driving the economy of central North Dakota."
The technology has made incredible strides, Helms said.
He said a typical Bakken well goes two miles down into the earth, turns sideways and goes two miles out through either the Middle Bakken or the Three Forks Formation.
"First, there's a string of casing and cement that protects your drinking water, another string of casing and cement that protects it farther and then inside that is another string of steel pipe," he said.
"Each one of these represents about the length of a football field so that two miles is separated into 30 or 40 football field length sections," he said. He said each one is hydraulically fractured individually.
Explaining what is done, he said, "What they do is they pump water in at about 7,000 pounds per square inch. That cracks that rock breaks it open so the oil can flow out of it. They pump sand in with the water so when they take the water back out the cracks will stay open. That sand then holds the cracks open so the oil can flow back out of those cracks and be created."
"This is 21st century technology. Most of the things that they're using to do this were invented since 2002," Helms said. "It's entirely new and it's the application of several technologies that came together in the late '90s and in the early 2000s."
He said so much has been learned in these recent years.
When Bakken first became big in this area in 2006, he said the average well was 195 barrels a day when it came on. Today the average well comes on at 955 barrels a day. That's the average," he said. However, he said,
people often see the headlines, which point out the 2,000 or 5,000.
"But what is remarkable about this play is the low risk, 99.9 percent of the wells drilled in the last year produced oil, 89 percent of them made money for their investors. So only 11 percent were below break even. That's unheard of in the oil industry, and that's what's driving the investment that you see today," Helms said.
He said the disaster in the Gulf is going to drive the investment dollars into North Dakota. He said if they're not going to be able to drill deep water wells in the Gulf of Mexico or East Coast offshore wells, then they have to invest that money elsewhere.
He said the result of that showed in a recent state sale of minerals in which the previous record was doubled and new companies came in to lease new areas in some of the areas which had been too high risk for companies already involved in the oil-field activity.