Dead Wells Come To Life

Oil wells in Montana, long abandoned and thought to be dry, have been resurrected, even as new oil fields are being developed. This new oil rush is a clear sign that supply concerns and sustained high prices have spurred a new wave of exploration and risk taking.

According to the Journal, geologists estimate that there might be as much as 200-400 billion barrels of oil in an area that covers parts of Montana, North Dakota, and Canada, known as “The Bakken.”

Even if the lower estimate is correct, “and if 10% can be recovered — a conservative rule of thumb used by geologists — the Bakken could eclipse Alaska’s Prudhoe Bay as the largest recent U.S. oil find.”

The Journal, cautiously adds the following: “the lofty predictions remain unproven, and skeptics remain. Most of the biggest oil companies are staying away. “Nobody has a good solid fix on this yet,” notes Mr. Morehouse, (David F. Morehouse, senior geologist with the U.S. Department of Energy’s Energy Information Administration) who says it will take more drilling to determine the true extent of the Bakken.”

http://www.financialsense.com/editorials/duarte/2006/0408.html