Plentiful Bakken Shale Oil Profitable at $40 a Barrel and Up

North Dakota is likely to increase oil production by 300,000 to 700,000 barrels per day that will make a difference if all else was the same.

The same production methods are being used in Canada's Bakken, Cardium in Alberta, Eagle Ford in Texas and many foreign countries.

Eagle Ford in Texas is producing about 80,000 barrels per day and that could double over the coming year. _NextBigFuture

Multi-stage horizontal drilling is picking up.

IBD
One example: Bingham Exploration is cranking up production for its Williston Basin shale oil wells in North Dakota, where Bingham holds leases on more than 368,000 net acres. As Bingham expands its drilling and production, it is likely to offer equity shares on the public market. North Dakota is more "frack-friendly" than some Eastern US states, and consequently North Dakota is on a sounder financial footing than Pennsylvania or New York states.

By the fourth quarter of this year, Brigham should be producing more than 18,000 BOE per day, according to Beskow, more than tripling the output of early last year.

And yet Beskow says Brigham is just getting started. "They are still in the very early stages of drilling," he said.

Brigham currently has 58 net wells (if a company has a 50% interest in 10 wells, it has five "net" wells) in the Williston Basin, Beskow says. That amounts to just 3% of its potential total of wells once it begins drilling more densely and in some of its less developed acreage. Beskow estimates that Brigham will have 190 net wells by the end of 2012.

Brigham is flourishing today because it made some aggressive investments even as other drillers cut back during the recent recession.

"Most of their success came after the 2008 crash," said Joel Musante, an analyst at C.K. Cooper. At that time, he says, there was "no clear consensus" on how to complete a well in the Bakken.

Brigham's contribution to fracking was to do more of it. "If you want to get more oil out of a formation, do more fracks," Musante said. _IBD

It is likely that recoverable reserves in the Bakken formation will continue to rise as exploration continues, and technology improves. At today's over-inflated oil prices, the growing crowd of successful horizontal oil shale drillers are profiting very handsomely indeed.