North Dakota’s Big boom will get bigger in 2011

Lynn Helms, director of the Department of Mineral Resources, said he expects 2,000 new Bakken-Three Forks wells will be drilled in 2011.

That number will more than double the new wells drilled this year and is the same as the number of all Bakken wells ever drilled.

“It’s going to be big, bigger than anything we’ve had yet,” said Helms.

He says that with some confidence because he’s got 870 well permits ready to go for next year and another 10 to 20 permit applications coming in every week.

What’s expected for next year follows a year that already set new benchmarks for every historical oil production measure on record.

Daily oil production is at an all-time high of 342,000 barrels, moving North Dakota to the fourth highest oil producing state in the country, and there was never a year with more drilling rigs operating in the patch.

Until next year, that is.

Helms said he expects 200 rigs in the oil patch (there are 166 now) and oil production to reach higher levels.

“It’s going to push our limits, it certainly is,” Helms said.

Economic forecasts indicate the price of oil will go up and some of the rush to drill in 2011 will be driven by oil companies’ need to secure their lease positions. Lease contracts for oil expire after a set number of years, generally three to five, unless there’s a well drilled, and oil developers will be working to secure their leases by getting one well drilled into every 1,280-acre spacing unit.

That will be just the beginning.

“The indications are that each of these spacing units will have four to seven wells,” as different formations come into play,  Helms said.

Ron Ness, director of the North Dakota Petroleum Council, said that theme of big play is showing up in another key way.

The boom is characterized by the transition of smaller independent companies selling out to larger companies, such as the recent purchase of North Dakota-based Dresser Oil Tools and Supply by McJunkin Red Man Corp. of Texas.

Helms agrees.

“It’s not the same oil business anymore. It’s much bigger and faster-moving than even a few years ago. It used to be a small club and it’s not that way anymore. There are new faces in new places and the dynamics have changed,” he said.

Ness said the rush to drill in order to cover leases could last a couple of years.

“Then the approach will be more systematic through the oil field as companies develop the infield,” he said.

Tom Rolfstad, who directs economic development for Williston, said his small city saw construction of 1,200 new units, from motel rooms to houses, in 2010. He expects next year to be even busier for his oil patch community as it tries to expand its entire infrastructure base — roads, water treatment, sewage handling — to keep growing. At least half the projected new wells will be drilled in a 70-mile radius around Williston, according to the North Dakota Oil and Gas Division’s website.

“It all boils down to housing. We can get people a job almost any day they show up, but where are they going to stay? If we add another 10 rigs out here, that’s another 700-800 people,” he said.

The Williston lifestyle is already accelerated and Rolfstad said it’s almost hard to imagine everything moving faster next year.

“It’s quite a pace. We have traffic jams, lines at restaurants and stores. Walmart has empty shelves and crates of new products and not enough people to put it all out. The peace of the countryside is gone. It’s more intense, longer lasting (than the last boom),” he said.

Rolfstad said community leaders are doing their best to keep up, but the level of activity — and what’s in store in 2011 — presents constant challenges.

“Whatever we thought, within three months we’re thinking, ‘Well, we weren’t thinking very big.’ It keeps unfolding in bigger and bigger ways all the time,” Rolfstad said.

Bismark Tribune

4 Comments on "North Dakota’s Big boom will get bigger in 2011"

Rick on Tue, 28th Dec 2010 12:16 am 



I would not call this a boom. It might help out the local economy for awhile, until the oil runs out. And just to put the boom in some perspective. The United States consumes an average of 20 million barrels of oil per day. And presently, the boom is producing only 342,000 barrels per day. That will not save us, in a Peak Oil world. Makes for good newspaper copy though.

SilentRunning on Tue, 28th Dec 2010 12:43 am 



Yep, North Dakota is having a small boomlet, and will continue to be one of the very few states without budget woes.

But the amount of oil that will come out of N. Dakota will in no way make up for the depletion in other parts of the world. I doubt they will ever make it above 1 million barrels per day, which is less than 5% of the US needs, much less the rest of the planet.

whitehairgrandad on Tue, 28th Dec 2010 2:28 am 



Some years ago, I was sitting at a redlight in Stroudsburg,PA. It was in the summer of ’89, and the temps were in the high 90’s.
I was sitting in my ’82 VW Rabbit diesel with the windows down. Across from me was a dapper dan in a greed Jag, with a british yellow scarf and one of those ‘english’ hats on his head.
Before the lights changed, I ran the numbers: for me, no payment, low monthly insurance, 2$20 a month for diesel. The guy on the right: $775 a month for the jag lease; 325 per monthfor insurance, 145 a month for gas.
Hummmmmmmmm, I guess I wasn’t so dumb afterall!!

scas on Tue, 28th Dec 2010 2:57 am 



The ever increasing number of wells drilled is indicative of the ever shrinking size of reservoirs – yet this article attempts to convey the high number of rigs and wells as a positive occurrence.